Last Updated on October 12, 2022 by Shield Funding Team
Applying for a traditional bank loan today is a very difficult process and because credit is so tight in this difficult economy your application often results in a denial. Even if you are approved it is a lengthy process and the repayment terms can be extremely inflexible. A merchant cash advance is an alternative financing solution for business owners who require immediate working capital with flexible repayment terms.
Timing is everything when you are a business owner seeking financing. Traditional bank loans have a long and arduous application process. Sometimes it can take as long as 3 months or more to get a bank loan approved. More importantly, there is a very high likelihood that your application will get denied after such a difficult process. Your business does not have the time to wait because competition today can be brutal and capitalize on any of your missteps. A denial will not only prove to be crippling for morality, it can result in the failure of your business after so much time has passed.
A merchant cash advance application can be approved within 24 hours and you can be funded in as quick as 72 hours. The reason for this fast process is that there is a very short and simple application. There are no lengthy credit checks because this business financing option mainly considers your most recent monthly gross revenues. What is even more significant is if you own a business generating even a small amount of revenue you are more than 90 percent likely to get approved. Having the funding when you need it can actually be a catalyst to a successful business in more ways than one.
Another negative about traditional bank financing is that it interest based so the longer you take to pay off the loan the more money it will cost you. Additionally, the payments that you have to make are often bulk payments and they are constantly looming over you no matter how your business is performing. These terms are not particularly favorable and can often result in failed or late payments, and the additional fees associated with them.
A merchant cash advance is almost the complete opposite. There is not interest associated with the cash advance there is simply a fee attached to the loan and the amount never changes. Whether you take 1 month or 18 months to pay off the merchant cash advance the amount never changes. What is even more advantageous is that you agree to pay off the business cash advance with a small portion of proceeds from future sales. If your business goes through a slow period because you generate less sales you will most likely make smaller payments. There is not a large payment hanging over your business and a loan amount that grows exponentially. Additionally, the payment process is done electronically so you never have to worry about late payments or additional fees.
In the business world receiving financing when you need it can be the difference between making money and losing it. Also, having a flexible payment process can be beneficial in unlimited ways. A merchant cash advance is a great alternative to traditional bank lending and can be the difference between the success and failure of a company.