Many small business owners struggle to gain access to the financing they need in order to purchase new inventory, keep up with monthly bills, or expand their operations. If you have found yourself in this same position, you should know that small business merchant cash advances could make it easier to get the financing you need. Continue reading to learn more about how these merchant cash advances could benefit your small business.
#1: Based On Sales History Not Your Credit Score
One of the reasons that so many small business owners struggle to get financing is that they either do not have a business credit score or this score does not meet the requirements for a traditional loan. Small business merchant cash advances allow business owners to avoid this issue altogether. This is because rather than basing approval on your credit score, merchant cash advances will rely on your sales history to determine eligibility. Merchant cash advances allow you to borrow against future credit and debit card sales that you make. Consequently, your ability to obtain this type of funding will be tied directly to your recent credit card sales.
#2: Only Needs To Be Repaid When You Have Sales
If your business experiences fluctuating sales, you may find it difficult to commit to a set loan payment each month. This is not a problem when obtaining a merchant cash advance. With a merchant cash advance, you will not have a set amount that you need to pay each month. Instead, you will repay your loan using a percentage of any credit card sales that you have. This percentage is automatically withheld each time you make a sale. This type of payment plan can make it much easier to manage your loan payments if your sales fluctuate significantly from one month to the next.
#3: Charges A Flat Fee Rather Than Accruing Interest
A traditional small business loan will continue to accrue interest until you have repaid the loan in full. This can significantly increase the cost of borrowing money and can make it difficult to know just how much your loan is really going to cost you in the long run. With small business cash advances, you will not pay any interest. Instead, you will simply be charged a one-time loan fee. The amount of this fee will be disclosed before you finalize your loan. Consequently, you will always have an accurate understanding of how much you will be required to pay back in order to satisfy this loan.
For more information, contact a local company like UrLendr.