Benefits of Small Business Financing by Merchant Cash Advance providers

benefits of small business funding

There are numerous expenses that a business owner has to incur in order to perform day to day activities of the business. Some of these expenses are making payroll, purchasing machinery and equipment, making payments of taxes, buying stock, and working capital expenses.

The business environment is dynamic in nature and therefore it is important for a business owner to be prepared to meet unforeseen circumstances. Small companies often face situations where they need fast business funding but they are not able to get financial assistance easily for meeting their daily expenses.

Furthermore, there is a chance that the company may not have any collateral security to acquire a secured loan. Taking loans from banks, financial institutions, and other credit unions involve a lot of legal processes and it is a very long procedure.

There are many proprietors that cannot wait for months to obtain monetary assistance as they need an immediate source of finance to take care of their requirements. Merchant Cash Advance is the best option for such small companies that can provide them fast business funding.

Read More: Fast Small Business Loans for Emerging Businesses

If your small business needs an immediate cash advance, then Merchant Cash Advance is the perfect choice for you. The providers of MCA can help you in meeting your urgent financial needs. The providers of this finance structure offer loan to small enterprises even if they have bad credit.

The sources through which small organizations can obtain financial assistance are listed below.

1) Bootstrapping

Bootstrapping is another name for self-funding. It is one of the most effective methods to finance a newly incorporated firm. Business owners of a new organization face a lot of issues when they apply for a business loan as financial institutions are reluctant to provide any assistance to them.

For fast business funding, you can either borrow money from your family and friends or contribute your own savings to finance your startup.  This source does not involve any complexities and formalities. But this source is only beneficial when you have savings and your family and friends are ready to lend you money.

2) Angel investment

Angel investors are the people who are interested in making investments in newly incorporated companies. These people have surplus finances. They do a collective screening of different proposals prior to making an investment. They are one of the best providers of fast business funding.

Angel investors have provided assistance to a number of outstanding organizations, such as Alibaba, Yahoo, and Google. Angel investors make an investment during the initial stage of business. This option of financing has some disadvantages as well. These people invest a lesser sum of money as compared to venture capitalists.

3) Crowdfunding

Crowdfunding is one of the ways through which your business can get fast business funding. In the procedure of crowdfunding, a business owner will provide detailed information about his or her business on the platform of crowdfunding.

Additionally, he or she will explain the main aim of their business and the plans for making gains. Moreover, they will mention the number of funds that their business requires. Crowdfunding is not beneficial for the companies, which do not have a solid business base.

4) Peer to peer lending

P2P lenders provide a platform that enables individuals to seek financial assistance from other people. This platform provides due diligence and matching services. Peer to peer loans are small loans, generally having a cap of 25,000-35,000 dollars. In this kind of financing, the lender does not lend funds to the business, rather they provide funds to owners of the business.

5) Merchant Cash Advance

If your small business needs fast business funding, then Merchant Cash Advance or MCA is the best option for you. A cash advance is different from a business loan. It does not involve a lot of paperwork, formalities, and can get approved very quickly. Moreover, it is not dependent on credit at all. This source of financing is way different from the traditional source of funding.

The finance structure, namely Merchant Cash Advance has become very prominent amongst business owners in the past few years. There are a certain number of industries that cannot get financial assistance through a cash advance, although the approval rate for MCA is equivalent to 95%. MCA is basically used for financing credit card sales. The repayment of Merchant Cash Advances is done by paying a fixed percentage of revenue received by making sales of credit or debit card in a month.

The best thing about this source of fast business funding is that it offers funds to companies that have bad credit. According to the eligibility criteria of Merchant Cash Advance, the small enterprises applying for the loan should have monthly deposits of worth 10,000 dollars and no inadequate funds. Moreover, small firms are required to maintain a minimum balance before applying for a cash advance.

a) Documents required to apply for a Merchant Cash Advance

In order to get a Merchant Cash Advance, a business owner will be required to provide certain documents, such as the bank statement of past six months, driver’s license copy, and a voided check. If the loan requirement is worth 100,000 dollars or more, then you are required to provide additional documents, such as Articles of Association and the statement of profit and loss.

b) Application process for fast business funding in the form of Merchant Cash Advance

The procedure for acquiring a cash advance from the cash advance providers is not a complicated procedure like a traditional loan. The application process of obtaining MCA is very quick and easy. It involves the following steps:

  •    Apply for the cash advance: In the first step, you are required to fill the application form of 2 pages. Plus, you are required to give your business tax ID, your social security number, and other important information about your business.
  •    Deposit the documents: In the next step, you will be required to provide your credit card as well as bank statements.
  •    Approval: After the submission of the documents, the provider of this source of fast business funding will check all the documents. Then, the business loan will get approved within a day.
  •    Receive the cash advance: After receiving the approval, the providers of Merchant Cash Advance will transfer the funds to the account of the small business within 2-3 days.

6) Government grants

Generally, the government does not issue grants to initiate or run a small business unless your company is working to serve a special purpose. The important thing that a company needs to keep in mind is that they are using the tax dollars invested by the government.

The government won’t provide you with any kind of support if you want to pay operational expenses, commence a business, and settle debts of the business. This kind of funding is a waste of time for most of the people. The government does not provide fast business funding like Merchant Cash Advance providers.

7) Small Business Administration

One of the sources of fast business funding for small companies is Small Business Administration. They provide a distinct program to the owners of small firms. The maximum limit of loans provided by SBA is 50,000 dollars.

These loans are very beneficial for new entrepreneurs. These loans have a very strict criterion of underwriting. It is easier to get these kinds of loans as compared to the conventional source of funding. Additionally, these types of loans do not get approved very quickly.

8) Factoring companies

Small organizations face a lot of problems when their clients ask for the terms of payment. If your small company takes funds from factoring companies, then you are required to give them an invoice to pay, which should be two months in advance. Through this source of fast business funding, you can get paid quickly.

Additionally, you can improve your cash flow. This form of fast business funding offers working capital immediately. But even factoring companies will not sanction a loan to you if you have a bad credit. This option of financing is only suitable for companies, which have a strong client base.

Read More: Boost for Alternative Lending Market

There are many ways, through which small companies and startups can raise funds but not all of them are the sources of fast business funding. These sources of finance are peer to peer lending, government grants, crowdfunding, angel investment, and bootstrapping. Each of these sources has some flaws in them. Some don’t provide loans to companies, which have bad credit. Some sources do not offer loans to startups and so on.

If your small business requires fast business funding to meet its day to day requirements, then MCA is the perfect choice for you. Merchant Cash Advance providers offer loan to companies within a few days from the date of approval.

The application procedure of this source of fast business funding is very easy. Additionally, bad credit is not a problem if you take a cash advance from MCA providers. The best thing about a Merchant Cash Advance is that the borrower does not need to provide a collateral security in order to obtain a loan. So, if you are a small business firm looking for immediate finances, then you should approach the providers of Merchant Cash Advance.

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