Running a small business in today’s downed economy takes careful planning and a backup of cash to protect one’s brand from those little mishaps that are known to take place.
Having to replace a vital piece of equipment that suddenly failed can eat into your payroll funds if you don’t have a supply of cash on hand. In times like this, business owners will often apply for a merchant cash advance to protect their business and to allow operations to proceed.
With the economic slump applying its pressure, most of us have anything but perfect credit. Thankfully, alternative lenders do not subscribe to big bank regulations when providing cash advances to struggling businesses. Read on to learn why merchant cash advances are the best solutions for small business owners in times like these.
Why are credit lines hard to come by?
Due to current hard economic times, lenders are not as likely to provide credit lines to small businesses unless their credit is sterling. It is ironic that big banks are partially responsible for the economic slump that ignited in 2008, yet they offer no leniency in helping small businesses — the very entities that are greatly responsible for economic growth.
However, thanks to alternative lenders, thousands of small businesses have been able to survive and provide salaries to members of the community.
How does a cash advance loan work?
There are two primary ways in which one can get a cash advance loan towards their business. Cash can be advanced according to future credit card receipts in which a mutually agreed upon percentage is taken from future earnings until the loan amount has been paid back.
Another option to consider is the fixed payment plan. These are typically paid back on a weekly or monthly basis until the loan amount has been satisfied.
Is it better than a standard loan?
A merchant cash advance is designed to service those who only need to borrow a small amount versus tens of thousands of dollars. If you own a printing service, and your machine breaks and needs to be replaced, a merchant cash advance is the ideal loan for this type of situation.
The borrower doesn’t have to put up collateral or offer a personal guarantee. Furthermore, utilizing this type of loan will not show up on credit reports and flag you should you ever want to apply for different loan types. Finally, there are no restrictions regarding how the cash is used, and the process is extremely fast with no hassles.
Making better profits
A merchant cash advance is a great way to turn a profit in a struggling economy. In an article published by ABC News on the benefits of a merchant cash advance, the journalist reports that businesses should take advantage of these programs in order to stock up on inventory before the holidays.
The article states that they are excellent alternatives to traditional bank loans in that they are fast, secure and don’t provide any hassles.
Securing your services
If you suddenly need to halt operations it will tarnish your business reputation. When you need cash due to an unsuspecting hiccup, or if you simply want to stock up on inventory before a busy shopping season, consider the merchant cash advance loan as a great way to stay afloat and make a profit in our challenging economy.