When to Secure a Small Business Loan

Any company will tell you that no plan, however well constructed, goes exactly as anticipated. No matter how cautiously you have set out your method for success, mishaps are more than likely to come up sooner or later. This could be an issue as normal as a sudden rise in fuel prices, or as difficult as your walk-in fridge failing one night.

When you manage an establishment, mainly while in the primary couple of years, your profit margins are low and a sudden problem could be the difference as far as making it and closing down. It will really come down to your ability to locate the money you need rapidly. Knowing that the cash to make good on that unexpected bill will now be in your pocket in a week or two can be all the difference.

Well, where does the cash flow come from? From your credit card machine, actually. All those times your business processed a purchase through your machine, you were actually building your reputation. Even though you might not have been aware of the possibility, many companies offer establishments like yours factoring agreements when asked.

Unlike a small business loan, factoring agreements or merchant cash advances involve you selling expected processing income to the factoring company in exchange for money furnished today. As long as your company has established a steady flow of credit card volume over the last several months, you are ready to apply. We aren’t talking about a few dollars, either; agreements run from $5,000 to $1,000,000 per location.

Merchant cash advances are readily managed without needing to kiss up to the big shot at your standard. Look closely at what your credit card factoring company can offer to help your establishment get through. You might want to consider shopping around before the crucial need arises. This way you will already know what to expect as far as documentation. Normally 4 months of merchant statements and a 1 page application are a must. Your establishment can usually obtain 100% – 150% of your monthly average volume. As you can see, this is way different from a small business loan.

All your establishment will need is a 1 page application, 4 months of processing, and a valid ID to get started. There are many options online and some financing companies who will even provide multiple offers. Attaining a few offers may help to ensure that you obtain the best deal for which you qualify. You will also need to know how much you process each month and what your monthly revenue is.