Merchant Cash Advance: Saving Small Businesses
The credit gap still exists between small to medium sized businesses and banks. It is not just a bad economy that has banks tightening their lending practices. There are many reasons that a bank can refuse to give a company a business loan or line of credit; company owners can be refused for time in business, bad or poor credit rating, or companies can be refused because of the type of industry just to name a few. The relationship between banks and smaller businesses is definitely a harsh one and it has created this belief that a bank is no longer an option to get funding. According to Sam at Shield Funding, a leading provider of merchant cash advances for over a decade, “Business owners just don’t believe lenders are willing to give them money.” However, contrary to this popular line of thought, there is an industry eager to give them a merchant cash advance.
The merchant cash advance industry has exploded over the last year. Some merchant cash advance companies have seen as much as a 300% increase in their approved applications in 2011. The major reason for this growth is that according to some industry statistics more than 90% of business owners are denied traditional financing. Without banks available to finance a big portion of America’s businesses it is easy to see why the merchant cash advance industry is seeing this type of blossoming. The companies that are seeking financing are good solid companies just experiencing a slow period due to the economy, an understandable business cycle. In fact, some companies are looking to expand and take advantage of the weakened competition but the banks are only looking at the history or current situation of the applicant. This is why merchant cash advance lenders are coming to the rescue.
A merchant cash advance provider is not restricted to looking at a business owners credit history or the type of industry they are operating in, the merchant lender structures the business loan based on future credit card receivables. Even if you are a new business, which would almost instantly exclude you from traditional financing, you are likely to find a merchant lender willing to give you financing. What is even more attractive about a merchant cash advance is the payments for the loan are made as a percentage of receivables. So if there is a slow business cycle in your payback period, your payments will reduce accordingly. A merchant cash advance has many names like credit card factoring or an unsecured business loan, but it is just another name for a structured cash loan to a business.
The merchant lending industry’s only limitation is people just don’t know about it. Banks have stigmatized smaller business owners into thinking that there is no money out there when in reality there are merchant lenders lining up to finance businesses. Shield Funding and their corporate website https://shieldfunding.com is one example of a trusted merchant lender in the industry and there are a handful of others who are out there ready to save America’s small businesses.
Merchant cash advance lenders are a great resource for business loans when traditional financing is not an option.