When running a business, it is inevitable that at some point of its operation, it will require a loan. It is often used on purchasing equipment, inventory expansion, renovation, or as working capital. A business will require money to finance all sorts of projects. Bank loans are certainly helpful, but it is not easy to obtain, you will have to go through a lot of processes. Particularly for small businesses which have a hard time getting an approval from the bank. As such, they require more stringent requirements when it comes to small businesses. The previous recession we’ve encountered isn’t helping the situation either.
All bank loans require extensive documentation. You will have to provide a graphical statement of your past and future income and how you plan to generate them. It is imperative to present a growth and management plan. Despite having all these requirements, businesses often go through some applications before they obtain a loan.
Merchant financing or business cash advance is a more appealing option for most businesses, be it a large company or a sole proprietorship. It provides a more immediate financing for the day to day needs of business. Although the interests are higher compared to bank loans, it is not much. A lot of private companies and even banks offer a merchant cash advance. The approval process is also quick; it can range from a few hours to four days. The cash required will be transferred to your account in a matter of days. For these reasons, the MCA or merchant cash advance is a more viable option for most business owners.
One of the requirements for a merchant service approval is a good history of credit card sales. This is because the merchant cash advance supplies a certain percentage of your future credit card sales. The deductions will be managed by the credit card processor. This is a good since the business owner won’t have to keep track of all the payment dates. You might also find no credit check financing helpful in terms of covering a wide range of customer. The money you will get from the merchant cash advance will vary depending on the sum of your credit card sales.