So you have just opened your restaurant and you've invested all your funds into it. After about one year of operation, your restaurant is suddenly in need of funds. But because it is just in its infancy, you may get limited sources for funds. Most likely, banks may not approve your business with a loan because of its current financial status. So what now?
One popular alternative tobusiness funding these days is a merchant cash advance (MCA). It is a form of non-traditional financial program that uses thecredit card factoring process. What is great about this type of business funding is that you can get the money even while your business is still growing. Small and medium companies can now get the chance of being funded even without a good credit history.
Upon agreeing with themerchant cash advanceprovider's contract, you will sell and forward them a percentage of your daily credit card sales, which will be determined as they factor your credit card transactions. The amount usually ranges from 12 to 20 percent of your sales. The money is deducted each month, until the total sum of entire cash advance is repaid.
There is no need for too complicated requirements when trying to acquire a business cash advance. That is what makes MCA a great option for small businesses. There is no personal guarantee required to avail of the funds for your business either. However, you need to grant the MCA company an access to your credit card transactions. Somemerchant cash advance providers require you to change credit card processors while others don't.
Bank loans have high interest fees. But with a cash advance, there are no interest fees or even processing fees. It is a type of business funding that small businesses have been waiting for in a long time.
You may be asking whya merchant cash advance is so easy to apply for. The provider gains profit from your business once your sales are high. They gain profit from helping other businesses with their financial needs. So it helps your business as well as theirs.