Tips On Getting A Cash Advance For Your Small Business
An increasing number of small businesses that have previously faced obstacles getting working capital now have a practical solution they can bank on. They are getting a cash advance on future credit card receivables. This method of getting needed capital is gaining momentum, especially in light of the inundation of Small Business Administration loan requests throughout recovery efforts on the Gulf Coast.
The cash advances taken by these credit-worthy businesses are called Merchant Cash Advances and are completed without the documentation, time and availability problems related with a traditional loan.
Here is how it works. Companies such as AdvanceMe, the nation’s popular provider of merchant cash advances, buy a share of small- and mid-size businesses’ future credit card sales. These assets, which usual lenders and investors do not value, assist business owners to access capital fast and easy without leveraging their homes or other personal assets. Businesses just sell AdvanceMe a portion of their future credit card sales at a discount in exchange for a lump sum of working capital today.
The procedure has a number of advantages for merchants:
– It assists small businesses oversee their cash flow during the year. This is usually valuable to businesses whose day-to-day operations are impacted by seasonality, like those in small college towns. It gives them access to the cash needed to weather the seasons, whether or not it’s their hectic season.
– Usually, a Merchant Cash Advance is recommended over the usual bank loan because payment of the debt is directly tied to the merchant’s revenue. This way, the Merchant Cash Advance Vendor only gets paid when the business gets paid.
– It grants business owners with the capital to fund marketing and advertising campaigns, purchase equipment, train workers and/or appear at industry seminars, which they might otherwise not be able to do.
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