Merchant Cash Advance(MCA) companies are becoming increasingly popular and make a significant part of the lending industry. These lending companies are playing a major role in the economic growth of the country by channelizing the savings of the public to the industrial and other sectors as loans and advances. The MCA companies are changing the rules of the commercial lending industry by providing cash advances for businesses quickly and easily.
Both responsible and unscrupulous companies are part of the lending industry, and it is wise to approach only those companies that are responsible ones to make cash advance availing and repayment process a hassle free one. Any business should follow certain guidelines when availing merchant cash advances from lending companies.
Here are the steps that you need to follow when availing a loan from merchant cash advance companies.
The Merchant Cash Advance companies are growing in double digits, and the rapid growth is turning the commercial funding market resulting in the lack of control. Today the commercial lending market is filled with every type of lender from responsible lending company to exploitative companies. Finding a legitimate Merchant Cash Advance company is a daunting task and following these guidelines can make the job easy for you.
Broker or Principal
It is advisable to deal directly with the merchant cash advance companies than a broker to avoid confusions related to terms and conditions of the agreement. But if your merchant cash advance company deals through a broker then make sure you see a copy of the contract before proceeding to the apply for the cash advance.
Genuine and established merchant cash advance lending companies have the good reputation, an industry association membership, and experience in advancing loans. The MCA companies have a self-regulation trade association since 2008 and being a member of the organization means they are verified and are regulated lending company. The experience of the company in the industry will reveal whether the company is reliable or not.
References & Speciality
Checking references will also help to determine whether a merchant cash advance company is a responsible one or not. Checking with the past clients of the company is the best way of evaluating the reliability of the company.
Purchase and Sale Agreement
While evaluating the experience and reliability of the merchant cash advance companies is the primary task, the next important thing that you need to do is reading the terms and conditions of the agreement. Since the companies are regulated by government bodies, there are chances that things may go awry. Hence, it is imperative to go through the terms and conditions of the agreement and seek clarification on things that are not clear before applying for the loan.
One more important thing that needs to be considered is the communication between the company /representative with you throughout the entire process right from application to complete repayment of the loan. Communication is critical when it comes to merchant cash advance loans as it is a sale based advance availed and is repaid as a percentage of sales.
Merchant cash advance companies aim at providing all types of businesses immediate access to funds without any collateral making businesses exploit the business opportunities to expand and grow. Choosing the right merchant advance companies can benefit both the lending company and the borrowing business and help in mutual growth.