Breaking Tradition with a Merchant Loan

You know the old sayings, such as, "Rules are meant to be broken," "A tradition without intelligence is not worth having," etc. Well, the preceding quotes definitely apply to the merchant loan. Sure, the bank loan is the traditionally used method of business financing, but what good is a useless tradition? Trying something new, like the merchant loan, can be refreshing, exciting and most importantly, helpful.

The merchant loan may not be the most commonly-used business funding method but for some small business owners, it is the best business funding option for their retail and/or service-oriented businesses.

These merchants are able to benefit from merchant loans because they process daily credit card sales, an important factor for merchant loan eligibility. Eligible merchants will have also owned their businesses for at least six months, have a year or more remaining on their business leases and have no unresolved bankruptcies.

How is a Merchant Loan Different?
The merchant loan differs from the traditional bank loan in many ways. First, merchant loans are completely unsecured. Small business owners can qualify for merchant loans without even having collateral. Also, as mentioned above, the requirements for merchant loan eligibility are much looser than bank loan requirements. Merchant loans and bank loans differ most in the area of repayments. Most banks will require borrowers to make fixed monthly payments on bank loans. However, merchant loan providers employ a flexible repayment method that allows borrowers to repay their merchant loans through a small percentage that is deducted from their businesses’ daily credit card sales. As a result, the merchant loan is paid off in about six to eight months and the payments are virtually unfelt.

If traditional business funding methods are no longer advantageous for your business, it may be time to step away from the old way of thinking and apply for a merchant loan.

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