Merchant Cash Advance is Taking Care of Business - Someone Tell Ben Bernanke - Just another Journalhome blog- JournalHome.com

Merchant Cash Advance is Taking Care of Business - Someone Tell Ben Bernanke - Posted at 9:13 AM on 3/7/2005 by terencerutle717

The Advantages Of Merchant Cash Advance And Merchant Funding, finance merchant cash, The Advantages Of Merchant Cash Advance And Merchant FundingBusiness line of credit online, merchant funding, and bank loans help entrepreneurs make their businesses successful. If only there was some alternative source of capital small businesses could turn to, we wouldn't have to worry. Oh wait, there is. Someone go tell Ben Bernanke that Merchant Cash Advance providers are taking care of business.

Are you worried about your business being left short of financing due to the global credit crisis? Are you concerned that risky SBA (Small Business Association) loans will add more problems than solutions for your business? Have you evaluated merchant cash advance as a possible funding option for your business? Are you unable to decide between SBA loans and merchant cash advance (also called a business cash advance)? If yes, then read on to find out which option is better for your business and can give it the time and resources needed to grow and progress.

Consider the following when choosing between a SBA loan and a merchant cash advance.

Minimal financial documentation required

If you are the owner of a well-established business, SBA lenders will ask you for current debt, loan balance and payment schedules, along with available collateral. New business owners must attach a business plan that reveals monthly cash flow projections for the first two years along with the SBA loan application. To determine your eligibility for the loan, lenders may consider credit card debt, liquid assets, personal loans and financial statements, tax returns and holdings of real estate.

With MCA you only need to provide two pieces of information, monthly credit card statements and the number of months in business. These two factors alone will determine your eligibility and what your loan amount will be.

Higher approval rates

Banks are cautious lenders. Even though SBA facilitates the loan, you receive money only if you can convince banks and brokers that you will be able to repay every penny on the loan. The volume of financial documentation evaluated coupled with lender caution reduce the chances of loan approval. The economic downturn has made it even more problematic to procure SBA loans.

Merchant advance providers, on the other hand, evaluate only your credit card receipts and number of months in operation. Unlike SBA loans, merchant advance laws do not include low FICO score and earlier bankruptcies as denial criteria.

High repayment flexibility and lower risk

With SBA loans, you cannot negotiate repayment terms after receiving the loan. Repayment schedule is fixed and incurs heavy penalties on breach. Banks may cease and sell-off your business assets, and even personal assets including your home and car in case of loan default, thus making SBA loans very risky in economically fragile environment.

Merchant advance offers a flexible repayment schedule. Every month you are required to pay a fixed percentage of your credit card sales. When your business is booming, you pay more. When your business faces the heat, the repayments don't stifle it further. The risk of default is thus minimal.

MCA hits the margins but is safer

Although MCA cuts into your monthly profit margins, failure to repay SBA loans can cause the closure of your business.

Merchant cash advance offers a better, low risk, and flexible funding option relative to SBA loans. Be certain to give careful thought and consideration to MCA before filling your SBA loan application.

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