Business Loans Are Tougher to Qualify For Compared to a Merchant Cash Advance

Restaurants are thought to be a part of the largest risk business ideas. This makes it painstakingly tough for a new culinary merchant to attain necessary business loans, both when opening the business and when innovation or upgrades are warranted. A small business owner may wait weeks or even months to hear a peep from…

Restaurants are thought to be a part of the largest risk business ideas. This makes it painstakingly tough for a new culinary merchant to attain necessary business loans, both when opening the business and when innovation or upgrades are warranted. A small business owner may wait weeks or even months to hear a peep from the local bank, and in the time being, the business could possibly go out of business.

An additional choice for acquiring business Loans is a merchant cash advance. These financing products fall into the category of credit card receivables factoring. Small business factoring is a product where a lender offers the merchant funds in exchange for a lower rate on future Visa-MasterCard revenues. That translates as follows: the credit card factoring lender will give you financing in exchange for a portion of your anticipated Visa-MasterCard revenues in the future.

Approval is always available within a day or two and the working capital is in your bank account within about ten working days – often less. No collateral is needed because the program is based upon future revenues.

Because the payment term is tied to actual receipts, a bad month's business does not need “creative bookkeeping” to keep up with a fixed payment amount. The one stipulation is that the small business owner must stick to the predetermined program or the small business owner can be held accountable for repayment.

The truth is that many merchants, particularly beginners, simply can not meet the approval stipulations set forth by the conventional banking industry. This does not necessarily mean that the merchant is performing poorly or that the small business owner is not reliable.

Most of the time the sole problem is the idea that the establishment is too new and has not had the time to establish a lengthy reputation and credit rating. Obtaining a merchant cash advance with a merchant account factoring agreement makes good business sense under these types of situations.

Since the requirements and qualifications are minimal; the program is much easier to get approved for compared to standard financing. Deals less than $ 75,000 usually do not require tax returns. The application is a single page; compare that to a bank loan. Aside from that a photo ID, merchant statements, and bank statements are all you should need. Getting your answer normally takes under 24 hours. Funds are usually released in under 1 week. That is very fast in today's world where banks are not lending.