Merchant Cash Advances by Excel Capital
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Merchant Cash Advances

Merchant Cash Advances and How They Work

Businesses that struggle with no collateral or no credit find it difficult to qualify for traditional financing. Companies in need of quick capital to expand or improve their operations face limited options because of these roadblocks. Numerous companies report strong sales and solid cash flow statements but do not meet the rigorous standards required by traditional lenders. However, financing programs exist that provides business owners with fast capital along with minimal qualification requirements. The money comes in the form of a merchant cash advance.

A Closer Look at Merchant Cash Advances

Technically, merchant cash advances are not the same as traditional business loans. Merchant cash advance companies’ package their deals where they collect remittance using a small percentage of daily debit and credit sales. Therefore, there is no fixed interest rate or payment. If a small to medium sized business owner can demonstrate strong credit and debit sales, they can then qualify for a merchant cash advance.

Another key aspect that differentiates merchant cash advances from traditional business loans is the working capital advance company often partners with credit card processors. In this scenario, the credit card processor agrees to hold back a specific percentage of credit and debit sales from the merchant. This guarantees remittance from the merchant to the company providing the cash advance.

What Makes a Merchant Cash Advance Unique

The primary purpose of a merchant cash advance is to service the financial needs of small to medium sized business owners. However, there are unique advantages included in the service that tailors to a specific business owners need. Here are some of those advantages:

  • Unlike traditional business loans, funds from a cash advance disburse in as little as three to four business days.
  • Merchant cash advances do not require a minimum credit score to qualify. Therefore, any company struggling with a weak credit profile qualifies for the funds they need.
  • Traditional business loans typically require some form of collateral to secure a loan. The collateral requirement causes many business owners to face the fact they may lose precious assets in case they cannot make their payment. However, merchant cash advances do not require any personal collateral to qualify. Business owners who have limited assets never need to worry about losing their collateral.
  • Since there is no fixed payment with merchant cash advances, business owners who run into financial trouble or weakening sales do not carry the burden of a fixed remittance.
  • Since payments come from a small percentage of credit and debit sales, a business owner will actually see their payment decrease during lean times. There is no advantage quite like this with traditional business loans.

When to Use a Merchant Cash Advance

Successful business owners understand how important it is to use financing wisely and effectively. Success is far more than how the business uses the funds, but how the business secures the funds. Great business leaders decide how they will finance their business needs before they actually apply.

Consider all of the advantages a merchant cash advance has to offer. Take into account the company’s current credit profile and how quickly funds are needed to improve operations. If both situations require immediate action, then it is time to use a merchant cash advance.

Apply today and discover the power of a merchant cash advance. Secure funds for renovations, advertising, inventory control, accounts receivable or any other business related upgrade that enhances the company’s daily operations. Take your business to the next level by applying for a merchant cash advance.

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