Merchant Cash Advance Loans: Are you a small business owner in need of urgent capital? Have you considered going for merchant cash advance loans as quick cash could resolve financial problems?
Merchant cash advance loans have proved to be an alternative financing solution to traditional small business loans. Rather than considering it a loan, the merchant cash advance providers consider it an exchange deal. The borrower demands for a slice of your future sales in exchange for the upfront sum of cash.
What type of businesses can opt for merchant cash advance loans?
Merchant cash advance loans are suitable for business owners with a study credit card or debit card business. Retail stores and restaurants are the most common types of businesses that opt for merchant cash advance loans.
What are the eligibility criteria of Merchant cash advance loans?
Although a wide range of businesses opt for merchant cash advance loans, this loan cost more than other business financing options. Business owners opt for these in times of urgent cash requirements when they are certain that their business will generate expected income and will be able to repay the amount.
Many fund providers have lenient standards to qualify for merchant cash advance loans as compared to other business loan types. This means that borrowers do not have to worry a lot about their credit score, collateral, or financial history. If these qualifying factors are not up to the mark, the businesses may still get cash advance loans. As far as your business is performing well among other competitors in the market, getting a loan is not a challenging job. Here are a few criteria lenders look for while giving out merchant cash advance loans:
- The borrower must have a minimum credit score of 525
- The annual revenue of the borrower’s business should be between $150,000-$200,000
- The company must be at least 18-24 months old
If the borrowers qualify the above criteria, It signifies that their business is likely to flourish in the coming future. This helps the lenders to have a surety that the borrower will not default on the loan amount.
What are the advantages of Merchant cash advance loans?
- Quick Funding Option
The most prominent benefit of opting for same-day funding of merchant cash advance loans is that they are the quickest business financing option. Since the decision of granting the loan amount is solely dependent on the cash flow and revenue of the business, businesses with study revenues are likely to get funding within no time. Lenders just check out the sales record and business cash flows and give away the loan amount as quickly as desired.
- Average Credit Score Is Also Acceptable
Unlike the other business loans, which essentially require a credit score of 750 or above, there is no such scenario with merchant cash advance loans. Since the merchant cash advance loan providers will get directly paid from credit card receipts, a credit score is relatively less important for them. The historical business performance and their future revenue statistics hold more importance for getting cash advance loans. Therefore if your business has been performing well lately but does not have a perfect credit score, it is still likely to get the cash advance loan.
- Physical Collateral Not Required
The Merchant cash advance loans are unsecured loans that do not require to offer physical collateral. This means that your business does not have to supply a physical asset to back up the financing. However, the merchant cash advance loan providers demand for a personal guarantee which can be a written agreement stating that you are responsible for keeping the loan.
Keep your business operational and moving by getting the merchant cash advance loan within no time!
Jorden Smith is a passionate writer and researcher with a knack for exploring news and website reviews. With a keen eye for detail and a love for uncovering hidden gems, Jorden’s work is always thorough and informative. When not busy writing, Jorden enjoys traveling and discovering new places. Stay tuned for more insightful articles from this up-and-coming writer.