Getting a Merchant Cash Advance is Possible even with Poor Credit

I’ve seen it hundreds of times; businesses approach a cash advance provider because the banks have turned them down, hoping to get funded but not really expecting it. They become surprised and delighted to find out that not only can they get funded; they get the money in a fraction of the time they thought was possible.

How do they do it?

On the surface a merchant cash advance and a business loan may look the same, but they are very different from each other. I’ll explain why;

Approval method

Traditionally, a bank will check your credit history and your assets to see if you are eligible for the loan. Because of the tightening credit market; getting approved has become increasingly difficult. If you have credit problems or if you don’t have enough assets for collateral; getting a loan could prove to be quite difficult.

In contrast; even though they check your credit, a merchant cash advance provider puts much more emphasis on your businesses sales potential rather than your credit history. If you do a steady business, then chances are you will get funded regardless of your credit.

Paying back the money

We all know how a loan is paid back. You pay back a predetermined amount each month until the loan is paid back with interest. You pay back the same amount each month, regardless how your business is doing.

A cash advance is unique because they advance you the money based upon your business’s credit card sales… it is paid back directly through your credit card processor. A small percentage of your daily credit card sales are held back to pay the advance. Of course you are given a monthly statement to let you know the exact status of your cash advance.

Not only does this method remove some of the risk associated with lending money; this also helps to insure a successful payback because the amount you pay back each day adjusts to your daily sales figures. This helps to relieve a lot of the stress if your business were to slow down. And because this is all done automatically; there are never any late fees or check to fill out each month.

How fast you get funded

We all know that getting funded through a bank can up to several weeks. It takes time for them to pour over all your financial records and make the necessary inquiries. It seems that they are always requesting more documentation weeks into the process.

A merchant cash advance is much faster.

All most providers require is a two-page form, 4-6 months of your merchant statements and a copy of your mortgage or lease agreement. One your application is sent in, the entire process takes less than a week in most cases. This is a reason in itself to consider a merchant cash advance.

I hope I was able to address some of your questions with this article. If you have more questions; I invite you to visit my site by clicking the following link to learn everything you ever wanted to know about a MERCHANT CASH ADVANCE.