If you’re considering starting your own business, it’s likely that money is the one thing holding you back. The cost of launching a business, no matter how small, can quickly put you over the edge, and your dream can turn into a nightmare. Even a tight budget can fall to pieces as unexpected costs arise. If you’re struggling to procure financing through the bank, especially if you have bad credit, then it might be time to turn to a merchant cash advance agreement. Going this route ensures you get the money you need fast without the pressure of high monthly payments.
This type of arrangement is not a loan, but rather a business agreement. A provider will give you a lump sum of money, and in return, you agree to give the provider a portion of your sales income until that money is paid back in full with interest. Whenever a customer pays with a credit card, a small percentage of that transaction total goes to the provider. The exact percentage will vary depending on the company issuing the merchant cash advance, but it typically ranges between 8-10% per transaction. Because this agreement is not a loan by legal definition, your credit rating is not a factor in receiving the funds, nor is it impacted should the amount fail to be repaid. This distinction also means that you might be eligible for a tax write-off.
Ultimately, your provider is investing in you as a business owner, so it is in their best interests for you to succeed. Because the amount you repay is taken from credit card transactions, your payments are based on how well your business is thriving. Slower months mean smaller payments, and months where you may have extra cash flow can help you get ahead and pay the amount back sooner. Without set payments every month, you have no deadline looming over your head. On average however most merchant cash advance agreements are settled within a year. Once the amount due is paid in full, you can enter into a new agreement with the same provider should you still need help with financing.
Whether you’re starting your business, or you simply need some cash to keep your head above water, a merchant cash advance can be a speedy way to keep your progress moving forward. Without strict approval criteria or the need for collateral, applications can be processed quickly, and you can have the money you need in as little as three days. If you’re serious about owning a business, don’t let bank loans stall you. There are always other options to get the financing that you require.