In the world of small-sized and mid-sized businesses, cash flow is always the king. Cash is the main thing which helps you maintain inventory, growing your business and paying suppliers. As the economic recession put damper on the credit markets, businesses start looking elsewhere in search of cash. You will be rather happy to know that the newest solution in town is the merchant cash advance loans or the MCA loans. They offer a perfect alternative resource of funding businesses for those entrepreneurs who lack perfect credit rating or the required collateral.
MCA doesn’t work like a loan and they are instead the processes or buying a portion of the credit card sales of a business’ future at a discount. In lieu of this, the MCA provider purchases a right to retrieve a portion every month. Here are few advantages of merchant cash advance loans.
#1: You don’t need to put any collateral or credit at stake
When it comes to business funding, merchant cash advance loans always offer a safe approach to get easy access to cash as the commercial loans usually have an impact on your credit. Merchants or business owners who take out a cash advance loan will avert the risk of losing their collateral in the event of a default. Neither will the lender check your score nor will he ask for any collateral requirements.
#2: Both collection and application process is easy
You need to go through no such hassles while funding your business with merchant cash advance loans. It is a pretty straightforward process that you have to start where the commercial lenders will check your financial statements, business plans and tax returns. The merchant cash advance providers offer 2 criteria, length of time in the business and monthly credit card returns. This is all they need to check.
#3: Easy access to cash
Since there is very little paperwork required in the process, it is needless to mention that merchant cash advance loans provide a superfast turnaround. On the other hand, commercial loans can take weeks and sometimes even months to process. Funding of MCA is usually available within a week of submitting your application. In case your business requires immediate funding, the instant response would be some vital asset.
#4: Approval rate is extremely high
Merchant cash advance loans usually rely on the performance of the business rather than on the credit of the applicants. The lenders adopt a pragmatic approach which lets the businesses to qualify for a cash advance. The amounts of cash advance depend on the average business and the monthly revenue in the past year.
Commercial loans have always been an extremely valuable resource of long-term financial funding but when an entrepreneur needs infusion of safe cash, cash advance loans is perhaps the best alternative. The provider of MCA loans collects a small percentage of the returns and hence businesses can easily aver the pain of defaulting on the loans and facing harsh consequences.