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Small businesses often find themselves in a cash crunch. There are very few options in such cases. One may try to borrow money from friends or relatives but there is always a question mark. There are loan sharks but it is risky. There are other options for instant supply of cash without any collateral.
Merchant Cash Advance is the best solution for small businesses like hotels, restaurants, professionals, retailers and even small manufacturers. It is a straight deal and one is never subjected to friends or relatives. It’s cash on demand, no questions asked. The process is relatively simple and there are minimal eligibility criteria, making it the best source of funding for small business owners. There are inherent advantages and the cons are only a few. Consider the advantages of merchant cash advance loans.
Fast Approval, Fast Disbursement
If money is needed urgently, there is no better way than this. One only needs to apply online, submit the request and then proceed with the process. Applicants usually receive the cash in their bank account within 4 days of making the request, provided all other requirements are met.
minimal paperwork
Unlike banks and other lending institutions that ask for a lot of documents, this mode of funding is the easiest when it comes to paperwork. One needs to submit only the bank statement for the last six months, proof of business ownership and proof of identity and residence. That is.
Best for people with bad credit
People with bad credit may find themselves in a bind, with no one willing to consider their request for temporary funds to address their difficulties. If they walk this path, it is a relief and they can really stand on their own feet. At this point, their credit rating can be improved with the help of the right lenders.
Best for businesses looking to expand or launch campaigns
Traditional lenders may insist on a solid project report to show why the borrower needs the money, how they will use it and how it will help them generate revenue. Small business owners rarely have the resources or want to pay a chartered financial specialist to prepare such papers. This way helps them to get cash which will help them to expand the business, buy equipment, modernize, give a new look to their retail store or launch campaigns from time to time to attract customers.
no collateral
One of the best benefits that is loved by the borrowers is that there is no need to deposit any collateral or guarantee. Just his personal word is enough to help him get the much needed cash.
easy repayment
MCA payments are usually tied as a percentage of daily credit card sales. One can also opt for a fixed monthly repayment. In the former case, the repayment amount is less if sales are slow and higher if sales are high. In any case, the repayment takes place over a year and till that time the borrower can use the money wisely to increase revenue.
Shortcoming
The only cons are that the factor rate is as high as 1.2 to 1.5 which translates to an interest rate of 20% to 50%. But still, an unsecured loan is always costlier. Another factor is that the business must have been in existence for at least one year or more and must have a turnover of at least $10,000. These are minor niggles.
The advantages of MCA far outweigh the minor disadvantages.
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