Small Business Factoring

A Business Cash Advance is becoming progressively more common in society these days. The current economic status and tough credit expectations are huge contributors to the boost in funds advances. It is tough for businesses to get the funds that is necessary with the increasingly strict stipulations for regular business loans. Merchant cash advances are an unconventional way of getting funds for normal business requirements. So how does a business cash advance operate? Let us explain

Business cash advances are a service provided by a funding institution to a small business owner that receives credit cards, most commonly in the retail or restaurant business. The merchant loan financing institution basically advances the small business owner a predetermined sum of money in exchange for a percentage of their future credit card receipts.

For example, let’s look at Jo’s Diner. Jo may not have adequate cash available to pay his employees or to buy new appliances for his kitchen. Say Joe needs 30,000 dollars and he called a Merchant Loan lender for the funds.

The agent would assess Jo’s previous credit card statements and see if he can be approved for the advance. They would figure out an interest rate for the working capital advanced. The rate is typically more expensive than a normal business loan because the advance is typically given to entrepreneurs that do not have the credit or collateral to get cash from a regular bank. If the fee for Jo’s advance is 30 percent then he would be getting the 30,000 dollars and paying the provider 39,000 dollars in future credit card sales.

The agent would get repaid the 9,000 dollars by taking a percentage of the daily credit card receipts the business takes in. Say the part the agent takes is eight percent of daily credit card transactions and the merchant received $10,000 in credit card receipts for the day. The merchant cash advance provider would take $800 (8% of the $10,000). This process would continue until the agent received the entire $39,000. This payment process goes up and down with the cash flow of the business. The percentage will stay the same so if your business has a bad period, you will be paying less. This is a huge selling point for the advance service. Conventional bank loans have a flat payment amount, which could be hard to pay during slow times. A merchant loan has the feature to follow a change in business cash flow.

A business cash advance is a helpful alternative to a business loan. Some may think 9,000 dollars is a expensive fee to pay but the criteria a merchant must meet for a regular loan is becoming more and more tough to get. A business cash advance is a method of obtaining immediate and easy money to meet business working capital needs.

Dating back to early 2008 Daniel Samoohi has aided thousands of business owners in finding trustworthy providers in order to review offers for business cash advance. By making providers compete with each other, Daniel assists businesses in finding great deals for a business cash advance.

Tags: Business, Business Cash Advance, Business Loan, Business Loans, Credit Card, Credit Card Processing, Credit Cards, loan, Loans, Merchant Account, merchant cash advance, Small Business, Small Business Loan, Small Business Loans
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With the economy teetering on the ropes after the sub prime home loan meltdown, merchants are finding it more difficult than ever before to qualify for a conventional bank loan. A merchant cash advance may be a great solution. A speedy turn-around time, reasonable cash advance amounts of up to $250,000, and a flexible repayment plan are all reasons for traveling this alternate direction for the working capital your business needs.

Still, a entrepreneur would do well to review more than just the working capital they can attain. The North American Merchant Advance Association (NAMAA) has rules of best business practices which they condone for merchant cash advance companies. If the agent offering you a business cash advance does not align with these rules, it is most likely best to look somewhere else. The practices are as follows:

-Provide lucid disclosure of fees – NAMAA does not approve of closing costs as part of the application process of merchant advances but urges that any such fees be transparently explained and disclosed. The total repayment figure should be entirely explained and figured out before finalizing the agreement.

-Provide lucid disclosure of liability – Basically, merchant advances are not considered loans; instead they are looked at as a purchase of future credit and debit card receipts. As such, the entrepreneur can be held personally in debt for any monies not returned if the small business owner opts to violate the agreement.

-Be mindful of a entrepreneur’s business cash flow – A normal contract involves that the small business owner repays a determined portion of credit and debit card transactions on a daily basis.

-Sales materials disclosure – All marketing materials should make it clear that the contract is one of factoring, not a loan.

-Keep tabs on your Sales Agents/Brokers – Merchant advance providers should make sure that their sales agents or brokers are righteously representing the product.

-Adequate repayment of outstanding Merchant Cash Advance Balances – if a entrepreneur opts to take an additional merchant advance with a new provider the new lender should immediately pay off the previous remainder rather than trusting the small business owner to cover the balance.

Dating back to early 2008 Daniel Samoohi has aided 1000’s of business owners find reputable lenders in order to compare quotes for a merchant cash advance. By making lenders compete with each other, Daniel also helps merchants find great deals for credit card factoring.

Tags: Business, Business Cash Advance, Business Loan, Business Loans, Credit Card Factoring, Credit Card Processing, Finance, Loans, merchant cash advance, Merchant Loan, Merchant Loans, Small Business, Small Business Loan, Small Business Loans
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You might be looking for a way to obtain business finance but having a tough time doing so. If this is the case, then you know by now that you need to go through many obstacles just to be able to get your small business loan applications approved by banks and other similar institutions. You also know that you need to be able to meet different sets of conditions that may be unpractical for you to agree. If you are having a hard time trying to get access to business finance, you should consider a merchant cash advance.

What can a merchant cash advance do and how does it solve your business finance dilemmas? It is among the best methods in getting access to business finance. Although it is relatively new in the United Kingdom, businesses in the United States have already been taking advantage of it for quite some time now. Those operating through credit card transactions are ideally the ones who would be benefit the most from a merchant cash advance. It is different from traditional loans since you don’t have a fixed lump sum each month to repay. Repayment is dependent on the average volume of credit card sales that you make daily. If your credit card sales are low, then you can expect you merchant cash advance repayment to be low as well.

There are a lot of benefits that a merchant cash advance can offer. These benefits normally cannot be matched by business loans from banks and other similar institutions. The best ones are the following:

1. Approvals for merchant cash advance would normally just be within 24 hours. When you get a business loan through banks or other similar institutions, it would normally take weeks for it to even be approved. You also would have slimmer chances to have business loans approved when you apply for them in the traditional way.

2. You will normally be able to get the funds that you need within 10 business days after the approval of your merchant cash advance. This will be invaluable to your business growth plans.

3. Flexibility is one great advantage you can be able to have with merchant advances. You can use the funds you will be receiving in any way you wish, unlike small business loans wherein the funds can only be used for a specific purpose.

4. There is absolutely no need to pay a fixed lump sum monthly once you go for a merchant cash advance. You will barely feel the repayments as they are based on the average volume of your daily credit card sales. The lower your credit card sales are, the lower your merchant cash advance repayment will be.

5. Having another merchant cash advance on top of your current one can be done easily and without the need for re-application.

6. You need not worry about it having a negative effect on your credit score.

7. You do not need to have collateral in order to get a merchant cash advance.

If you are still skeptical about the many benefits that a merchant cash advance can give your business, try talking to a specialist who will be willing to help you with any concerns that you may have. To be able to qualify for one, all you need to do is make sure your business is operating for at least a year upon application and that you deal with credit card transactions. It’s as simple as that.

Merchant Cash Advances and merchant loans can be approved in a snap, with Credit for Merchants

Tags: Business Funding, Cash Advance, Finance, funding, Lending, merchant cash advance
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