Merchant Cash Advance is considered to be a feasible option for small entrepreneurs to avoid the business debt. This loan is a valuable financial tool, especially designed for a wide range of businesses. It is considered to be the most flexible form of financing. A Merchant Cash Advance provides loan to business owners in return for a share of future sales. It is easier for the entrepreneurs to apply for a merchant cash advance than traditional loan from banks. The payment structure of this loan is considered to be lucrative for the business owners.
The Merchant Cash Advance payment fluctuates with the sales volume of each business. Therefore, it provides business owners flexibility that helps to manage their cash flow. This type of flexibility is beneficial, especially during economic recession.
Many people may not be aware that a Merchant Cash Advance is not a business loan. A business loan creates financial obligations and loan is offered on the basis of loan repayment conditions like rate of interest, loan repayment term and so on.
Recently, banks have become rigid on the lending terms and conditions. However, it is quite easy to apply for a merchant cash advance and the loan approval is not determined on the basis of your credit score. If you apply for loan from a traditional lender, then you need to have a credit score above 700. However, a business owner can apply for a merchant cash advance, despite poor business credit report.
There is no penalty charged on a merchant cash advance. If your business is not generating revenue, then the repayable amount also reduces. It may be calculated on the percentage based on your income. Unlike traditional loan program, you’re not required to pay a specific amount each month. In case you delay on Merchant Cash Advance payments, you’re not required to pay fines or penalties.
You are not required to pay interest on merchant cash advance, so you pay back the total cash provided to you. However, you need to pay more than the amount you borrowed initially. The calculation is based on the value of the merchant cash advance against repayment. Therefore, this loan is definitely a beneficial option as you can avoid overwhelming debt that you may incur with accruing interest on the outstanding balance.
It is considered to be a prudent decision to go for a merchant advance and avoid unnecessary financial burden. You can get this loan within a week, as the business organization is not required to undergo credit check. A merchant cash advance is an excellent alternative when weighed against traditional business loans.
A merchant cash advance can definitely help you avoid business debt and financial stress. Therefore, you can choose this loan over traditional loan from the bank in order to avoid financial obligation.