There comes a day in every business owner’s life when important choices must be made in regards to their company’s future. Many times, these decisions will need some serious capital, and if you are counting on a traditional bank, then you will most likely end up with nothing. For those incidences, merchant loans or alternative bank loans can be the best option to increase money.
Merchant loans are simple to qualify for and offer a lot of flexibility. Unlike traditional business loans, you will not need perfect credit or a couple of years in business. If you have those variables satisfied, great, but they aren’t necessary to receive approval. All you will need is four months of merchant processing statements and a one-page application. The turn time on approval is as short as twenty-four hours, and you can have the money within seven days. If that is not alluring enough, the flexibility in paying it back shows even more benefits. Traditional bank loans require a set payment each month. They don’t care how that payment may deteriorate your cash flow or capability to meet weekly obligations; their only concern is getting paid.
The Way Merchant Loans Are:
While factoring is a growing industry and is here to stay, many CEOs are unfamiliar with the procedure. Once you have created a merchant account and have a consistent track record of credit card sales, you, as a merchant, can sell a portion of your anticipated credit card sales for a discount to a specialist who provides these alternatives to business loans, in exchange for a lump sum paid out almost instantly.
Best of all these agreements do not ask for a personal guarantee. Should you close down, you are not liable for the remaining payments. What makes the finance company providing the merchant account loan so positive; they have been offering this type of financing for over ten years. They acknowledge that this model is effective. Money infusions paid back in a short time without any hurdles. By the time you complete a bank loan, you will have paid more than twice for the capital. Merchant loans will never be that expensive if taken through a ABL Credit Facility. All merchants should review the cost of the money and conclude if it makes sense for their company. If you can increase business or make it through a tough time, then it will.
An extra key factor of this arrangement becomes apparent after you understand the remittance terms. Your payments will be adjusted to reflect your monthly credit card transactions. Some months you will give back more, others less, but it will always be a small, set percentage of what your business brought in.
Where and when you use the money is your choice:
Bank loans are going to require you to determine, ahead of time, exactly how you will apply the funds you are loaned. By talking with a factoring broker, you decide what the smartest application of the cash you obtain is. Whether it is an expansion, debt reduction, or renovation – it’s all up to you. When you think about it, you have a consistent history of success with your company at this point, why wouldn’t you realize how best to use the funds.
Before finding yourself wanting to finance for your company, think about creating a rapport with a merchant loan broker. Find out what programs are available for financing important purchases and how to qualify. This way, when the moment comes, and you need to move forward, you will be aware of what to do.