Advantages of merchant cash advance
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Written by Atila on August 26, 2008 – 7:51 am
Merchant cash advances help business owner’s open doors for more types of financing opportunities. Business cash advances are a unique funding method because it’s a purchase of future credit card sales so we have to use specific language consistent with purchase of future credit card sales, like payback rate and discount rate instead of commonly used interest rate on bank loans.
A business cash advance lender can give to a business owners a sum of cash advance up front. In exchange, the small business owner will pay back the principal amount plus the fee, by giving the lender a daily percentage of their visa and master card sales until the payback is completed.
The daily payback percentage won’t be higher than 10% of daily gross sales, the daily percentage being based on the monthly credit cards sales volume and the amount of cash advance required. The payback time-frame is structured for a 6-9 months term, but it’s not fixed, and there won’t be any penalties if it takes longer.
Business owners usually must switch the credit card processor because the advance is paid back automatically as a percentage of each batch’s proceeds, but the rates will be the same if not better. Just a small number of merchant cash advance lenders don’t require the merchant to change their credit card processors company. Most time this won’t be a problem at all since the rates will be matched.
What are some of the advantages of merchant cash advance?
A company offering merchant cash advance is onlinecheck.com. Their features:
- 7% payback* over 12 months. Easier on daily cash flow.
- Get approved in 24 hours
- NO closing costs, NO points, NO application fees
- NO obligation to find out how much cash you qualify for
- Does not show as a debt on your credit report
- May be tax deductible!
- Poor credit is no problem
- No personal guarantee - No collateral required
- We quickly fund businesses from $5000 up to $1 million dollars
- No financials required
- 95% approval rate
The money is available much faster than it is with a bank loan. Unsecured merchant cash advances are specially a great option for retail and restaurant merchants, not only because these types of businesses can hardly be funded by the traditional bank, but also because of the immediate liquidity and simple process.
Another great advantage of a merchant cash advance, is that the business owner won’t risk he’s personal assets, because there’s no collateral required.
