Info *
Although many financial advisors suggest exercising caution regarding
alternative business funding like merchant loans, there are many benefits to
choosing this lending route for your small business they are quicker.
Many of the merchant cash advance services can approve your application in only
minutes and transfer the borrowed amount to your business account within 24
hours. So, when you need to make payroll or you want to jump on a business
opportunity and can't wait weeks for approval, this lending method seems great.
Even the slower of the business cash advance companies get money to you within
three days after your application is approved.
Plus
When you repay a loan a little at a time, such as with a 5 percent hold-back
rate, which is the percentage you agree to repay daily based on your incoming
revenue, it doesn't hit your business's bank account as hard as a lump sum at
the beginning or end of every month. And because the amount you repay is based
on how much you make each day, you aren't paying back a lot of money.
To find the best merchant cash advance service, look out for a company
transparent about its rates and fees. It should offer low repayment costs and
penalty-free repayment terms. If you can afford it, it's best to find a company
that offers prepayment discounts so you pay less in interest.
If you're already using PayPal for credit card processing, it's a good lender
option. PayPal requires that you make $20,000 per year in sales, and it lets you
borrow as little as $1,000. You can repay the borrowed amount based on a fixed
daily percentage, which is less of a hit to your bank account than a monthly
cost. Also, its repayment cost averages 6 percent, the lowest rate among the
services we evaluated.
Square is another good choice, especially if you're already a customer of the
credit card processing company. Its repayment cost is lower than the average at
a range of 11 to 15 percent, and it has no minimum repayment requirement, which
gives you more flexibility as you pay back what you've borrowed.
American Express also offers one of the lowest repayment costs of the merchant
cash advance services The company may require a personal guarantee so
they're sure they get their money back, but it also offers a prepayment
discount, so you can cut the cost of your cash advance even lower than your
first agreement. Qualified businesses can borrow up to $2 million, the most of
all the services There are alternative business funding solutions available,
but if you've exhausted your resources and you need cash now, a merchant
cash advance may be what's best for you and your small business. Be sure
to read contracts carefully and that you understand what you're agreeing
to before signing on the dotted line. |