Business Loans Are Tougher to Qualify For Compared to a Merchant Cash Advance

Restaurants are thought to be one of the largest risk business industries. This makes it painstakingly hard for a new culinary merchant to obtain desired business loans, both when opening the business and when growth or repairs are warranted. A small business owner could wait weeks or even months to hear a peep from the conventional bank, and in the meanwhile, the business could possibly go out of business.

An additional choice for attaining business Loans is a merchant cash advance. These financing programs fall into the category of credit card receivables factoring. Small business factoring is a program whereby a lender gives the small business owner funding in exchange for a lower rate on future Visa-MasterCard revenues. That translates as follows: the credit card factoring financier will offer you financing in exchange for a portion of your anticipated Visa-MasterCard receipts in the future.

Approval is frequently available within a day or two and the working capital is in your bank account within about ten working days - often less. No collateral is needed because the product is based upon future revenues.

Because the pay back schedule is tied to actual receipts, a bad month's business does not need "creative bookkeeping" to keep up with a fixed payment amount. The one stipulation is that the merchant must stick to the predetermined contract or the small business owner can be held accountable for repayment.

The truth is that many merchants, particularly beginners, simply cannot meet the approval conditions set forth by the conventional banking industry. This does not necessarily mean that the merchant is performing badly or that the merchant isn't trustworthy.

Most of the time the sole problem is the fact that the business is too new and has not had the time to establish a lengthy reputation and credit rating. Getting a merchant cash advance with a merchant account factoring agreement can be good business sense in these types of situations.

Since the requirements and qualifications are minimal; the program is much easier to get approved for compared to usual financing. Deals less than $75,000 usually do not require tax returns. The application is a single page; compare that to a bank loan. Aside from that a photo ID, merchant statements, and bank statements are all you should need. Attaining your answer normally takes under 24 hours. Funds are usually wired within a week. That is very fast in today’s world where banks are not lending.