Maybe you have been turned down by a bank for business funding and are wondering whether or not you will qualify for a merchant cash advance if you have bad credit? The short answer is yes. I should have said probably. Let me explain.
Most funding companies will accept business owners with a credit score above 525 and if they meet certain other criteria. I guess the question is what do you consider bad credit. If you are that person with a 525 or a 560, you have a good chance of getting approved but here is an idea of what else underwriters will be looking at. They will look at your merchant statements to make sure you have consistent volume over a period of time usually four to twelve months. Remember because you are not signing a personal guarantee, the only assurance the funding company has of you paying the advance back is if your credit card volume stays consistent. They will look at your average ticket. The lower the better but most will take up to a $500 average ticket. Some will take higher. They also want to see a large number of batches, usually 12 or more in a month.
They will also look at your credit report regardless of your score and see if you have any judgements and liens. If you have a payment plan and can show them a copy of this plan along with a cancelled check, they will overlook it. They also want to see your bank statements and want to see if you have any NSFs. They want to see trending. If you had 12 six months ago but had only one last month, then you are probably ok.
But let’s say you are below a 525 and have some other issues, maybe NSFs, you can still get approved. There are a couple of starter programs out there. Basically it is a trial advance. The funding companies will advance you only a small percentage of what they normally would, maybe 20-30% of your monthly credit card volume. Then they will see how well you pay it back. They may require you to get two smaller advances and once you display you are a good risk, they may give you an amount that you would have gotten if your credit was better.
So if you need cash, the banks won’t give you a dime, and merchant cash advance companies have said no, don’t despair. There are a couple of options but you may have to prove you are a good risk before you get all the money you would like. If you are credit challenged and need funding, check out a merchant cash advance.
http://www.merchantcash.com
Wednesday, June 16, 2010
The Difference between a Merchant Cash Advance and Business Loan
If you are a small business with a less than worthy credit score for bank lending, but make at least $3,000 in credit card income? If so, you don’t have to be limited by a low credit score as there are merchant cash advances out there that can give you the funding you need for business growth, venture capital, or working capital. These merchant cash advances have worked very well for small businesses in the past ten or so years as it plays more on using future sales as collateral in order for these businesses to get the funding they need.
What is the Difference from Business Loans?
Although businesses have for many years had the option of business loans to obtain funding, merchant cash advances offer a better option for businesses with a credit score below 740. These days, most banks just aren’t going to trust a business with a lower credit score to lend them money. Cash advances are also less regulated than these bank loans. This makes it easier for these merchant cash advance providers to provide funding by purchasing future sales of the business. For this reason, these providers are looking more at the monthly income brought in from credit cards, mostly the major credit cards like Visa and MasterCard.
There is also a lot less needed in order to secure the advance compared to a business loan. Many times, a small business loan requires several documents including:
Business plan
2-3 years of personal and business tax returns
2-3 years of personal and business financial statements
There are also many other things that may be needed including:
Application Fee
Personal Guarantee
Closing Costs and Hidden Fees
Collateral on all Business and/or Personal Assets
So the difference here is that merchant cash advances don’t require any of these things at all. There is no business plan needed, and most businesses that have been in operation at least 2 years are approved. There are no tax returns or financial statements needed, just proof of monthly income from credit card sales to ensure there is something to purchase. Although there is no personal guarantee required, there is a guarantee against fraud or intervention needed, to ensure that there will be no issues when the provider attempts to collect their payment through the credit card receipts. While bank loans could take up to months for the approval process, merchant cash advances are approved within 48 to seven days in most cases, offering the ultimate option for small businesses in need of immediate capital. For more information visit: http://www.merchantcash.com/
What is the Difference from Business Loans?
Although businesses have for many years had the option of business loans to obtain funding, merchant cash advances offer a better option for businesses with a credit score below 740. These days, most banks just aren’t going to trust a business with a lower credit score to lend them money. Cash advances are also less regulated than these bank loans. This makes it easier for these merchant cash advance providers to provide funding by purchasing future sales of the business. For this reason, these providers are looking more at the monthly income brought in from credit cards, mostly the major credit cards like Visa and MasterCard.
There is also a lot less needed in order to secure the advance compared to a business loan. Many times, a small business loan requires several documents including:
Business plan
2-3 years of personal and business tax returns
2-3 years of personal and business financial statements
There are also many other things that may be needed including:
Application Fee
Personal Guarantee
Closing Costs and Hidden Fees
Collateral on all Business and/or Personal Assets
So the difference here is that merchant cash advances don’t require any of these things at all. There is no business plan needed, and most businesses that have been in operation at least 2 years are approved. There are no tax returns or financial statements needed, just proof of monthly income from credit card sales to ensure there is something to purchase. Although there is no personal guarantee required, there is a guarantee against fraud or intervention needed, to ensure that there will be no issues when the provider attempts to collect their payment through the credit card receipts. While bank loans could take up to months for the approval process, merchant cash advances are approved within 48 to seven days in most cases, offering the ultimate option for small businesses in need of immediate capital. For more information visit: http://www.merchantcash.com/
Friday, June 4, 2010
Who can Use a Merchant Cash Advance and Why?
There are many different types of loans and cash advances out there these days, but who are merchant cash advances for, who can benefit the most, and what can be done with them? These are some of the questions circulating the industry as there are more and more merchant cash advance providers that are offering better rates and better terms. Understanding who benefits and who should use them involves knowing what they are and what they can be used for to fully grasp who gets the most from these advances. Sure, they aren’t for everybody, but for the businesses that have been using them, they have proven quite effective at providing the funding needed in an adequate time frame and with a decent payment in return.
Who is Business Advances Intended for?
A merchant cash advance, or business advance is a type of working capital funding for small businesses, aimed mostly at those in the retail, restaurant, or similar industries. These small businesses may have poor credit due to past economic shortfalls due to client defaulting and what not, but are still bringing in an adequate income through credit card transactions. Typically, merchant cash advances are for small businesses with a credit score of less than 740 but no less than around 520. This provides assistance for those with poor credit, but ensures the credit isn’t so poor there is no chance of repayment.
Who can benefit the Most from Merchant Cash Advances?
For those small businesses that have poor credit and aren’t able to get bank funding or can get bank funding but with too many stipulations, terms, fees, hidden costs, and extremely high interest, merchant cash advances could be quite beneficial. These merchant cash advances offer quick funding, many times approved within 48 hours or up to 7 days, and with minimal catch. There aren’t interest fees that will begin to mount extremely high and there are no hidden costs. Business cash advances can provide the working capital needed immediately just based on future credit card sales.
Merchant cash advances can be used for growing a business larger, adding new equipment, increasing service provision, or even just working capital to continue efficient operation. These advances could by computers for an office or seating and tables for a restaurant, even a new clothing line for a retail outlet. There are countless options and endless potential, and an easy pay back that provides many small businesses with the right answer for funding. For more information visit: http://www.merchantcash.com
Who is Business Advances Intended for?
A merchant cash advance, or business advance is a type of working capital funding for small businesses, aimed mostly at those in the retail, restaurant, or similar industries. These small businesses may have poor credit due to past economic shortfalls due to client defaulting and what not, but are still bringing in an adequate income through credit card transactions. Typically, merchant cash advances are for small businesses with a credit score of less than 740 but no less than around 520. This provides assistance for those with poor credit, but ensures the credit isn’t so poor there is no chance of repayment.
Who can benefit the Most from Merchant Cash Advances?
For those small businesses that have poor credit and aren’t able to get bank funding or can get bank funding but with too many stipulations, terms, fees, hidden costs, and extremely high interest, merchant cash advances could be quite beneficial. These merchant cash advances offer quick funding, many times approved within 48 hours or up to 7 days, and with minimal catch. There aren’t interest fees that will begin to mount extremely high and there are no hidden costs. Business cash advances can provide the working capital needed immediately just based on future credit card sales.
Merchant cash advances can be used for growing a business larger, adding new equipment, increasing service provision, or even just working capital to continue efficient operation. These advances could by computers for an office or seating and tables for a restaurant, even a new clothing line for a retail outlet. There are countless options and endless potential, and an easy pay back that provides many small businesses with the right answer for funding. For more information visit: http://www.merchantcash.com
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