Merchant Cash Advances for New Business Loans

new business loan

Many businesses, whether small or big sometimes face difficulties obtaining a new business loan. Brand new enterprises face a similar problem in that they are turned down more often when they seek business loans, even if the enterprise is already established. As an owner of a new or already established business, you need to keep your options open.

Currently, there are several alternatives for new business loans. Some of the options you might have come across include online lending, angel investors, venture capitalists, crowdfunding, invoice advances or factoring, and grants.

With these options available, you might think it would be almost impossible to lack new business loans. The fact is, you can still fail to secure a business loan with these options, although it is good to keep them in mind.

Consider Merchant Cash Advances

Under the merchant cash advance option, the funding you get is not regarded a loan. Here, you get cash up front against the future-credit card sales that you will make. The advance is later recovered according to a predetermined fixed amount daily or weekly.

Acquiring a new business loan through this method is quite easy and fast since most of the MCAs providers operate online. You should understand that MCAs are quite different from other online sources of new business loans, such online lending. The MCAs concept is however close to factoring or invoice advances. With MCA providers, you need to make sales in order to repay the advance, unlike invoice advances, which are based on sales already made but owed.

You also need to understand that MCAs providers will not fund a startup as such. MCA providers will give you the cash to meet your business based on the future credit card transactions. This means that your business:

  •    Should be conducting credit card transactions-some MCA providers also deal with business that does not make credit card transactions
  •    Should have a credit card transactions history-a specified period back
  •    Should show capability of paying back the advance from future sales, a factor established from past credit card sales

This is why you should obtain a New Business Loan from MCA Providers

The process of getting a new business loan from MCA providers is less complicated and less time consuming when compared with traditional funding options like banks. Banks often look at your credit rating and how old your business is before they give you a business loan. MCAs usually do not consider these factors. Whether your business is new, or if your credit rating is not good, MCAs will most probably give you the cash as long as you meet the conditions listed above.

More importantly, a new business loan from a MCA provider will be custom designed to meet your specific needs financial needs. The loan will also have no restrictions, as is often the case with banks. Once a MCA gives you a new business loan, you are free to spend it on any business need that your enterprise might have. Organizations such as banks will require that you spend the borrowed loan on what you specify as your business need.

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