The business industry over the past few years has become a tight credit industry with many businesses making up for the losses of their consumers. Let’s face it, as the consumers begin to feel economic constraint, business too begin to feel this stress. As less customers and clients are able to make their monthly payments, these businesses are at a great loss. Just consider 10 clients defaulting on their monthly payment; the company could be at a loss of thousands in operating revenue and working capital. At the same time, the business’s credit score is decreasing making it harder and harder to obtain funding. With banks typically only lending to businesses that hold a credit score that is no less than 740, this creates a challenge for small businesses.
The Small Business Solution
So for these small businesses, there is a cash advance that is about ten years old and has begun creating a strong financial restructuring foundation for many small businesses: a merchant cash advance. The key to makes the merchant cash advance the ultimate solution for these businesses is that it offers the funding that would otherwise be unavailable due to credit limitations. Offering a funding solution for small businesses with a credit score as low as 520, merchant cash advances are providing opportunities that are otherwise not available. The funding could be anywhere from $10,000 to some lenders offering as much as $500,000 in a matter of 7 business days, very quick and very beneficial to these small businesses.
Qualifications for a Merchant Cash Advances
Merchant cash advance providers are able to offer these cash advances many times with no collateral required to secure funding and repayment is made through a small percentage of future credit care payment receipts. So, small businesses get a lump sum for venture or working capital and in return repay the merchant cash advance provider with a share of the future sales made by the business. This is mainly why the cash advance approval is based in part on monthly and annual credit card transactions within the business.
A merchant cash advance could be the answer for small business in an industry that isn’t dominated by high credit scores anymore. There are more businesses that are able to earn the revenue, but due to economic stress have seen a sliding credit score. These cash advances work with the future sales of these businesses to secure funding they need quickly.
Showing posts with label merchant account cash advance. Show all posts
Showing posts with label merchant account cash advance. Show all posts
Tuesday, July 20, 2010
Wednesday, June 16, 2010
Merchant Cash Advance...can I get a cash advance with bad credit?
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
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, February 10, 2010
So you own a business and need money? Does this sound familiar?
OK. So you own a restaurant or retail business and you need funding. You walk into the bank and tell the banker your story. You tell him your credit has suffered a bit recently and your sales have declined a bit from last year but you need money. At this point the banker breaks out into laughter like he just heard Robin Williams doing his monologue at the Oscars. Maybe this is exaggeration and certainly not funny especially since the life of your business could be hinging on whether or not you get this funding. What is laughable is that banks keep saying they are lending money and business owners keep saying otherwise.
Restaurant funding is getting increasingly more difficult to obtain especially if you approach a typical bank. We have all heard in the news that banks have been given billions in bailout funds to secure and stabilize the banking system which in turn should encourage banks to lend again which would stimulate the economy. That is great in theory but the reality is that small business owners and especially restaurants can’t get financing from a bank. Recently I was told by a bank representative of a very large National bank located in N. Carolina that starts with a W, that in order to get a loan you needed a 740 credit score or higher. Compare that to two years ago when 640 was acceptable. He also told me that they would have to provide two years of tax returns and needed to show increasing sales year over year. That alone alienates about 90% of all businesses in the US. How many had an increase over last year? Two years ago you could get a loan with stated income which means you didn’t have to prove it and no tax returns. Wow, have things changed. If you are going to try the bank loan route, be prepared to bring your tax returns, personal financial statements, great credit, your first and second child, and a lot of begging. And after giving it your best shot, you too may very likely go to the mailbox in three weeks and open the dreaded letter with the word Declined stamped on it.
So what do you do if you own a business, your name is not Gates, and you need to fund expansion, buy inventory, or whatever else you do in the normal course of running a business?
There is another option. It is called a merchant cash advance or business cash advance and is becoming an extremely popular option largely due to the fact that banks are just unwilling to lend money. Not to mention the fact that it is also a much easier process. There is very little paperwork and the benefits are many. There is no personal guarantee required, no collateral, and poor credit above 520 is typically ok. Oh, and you can get the funds typically within 7 days. There are lots of differences between companies so make sure you choose wisely and don’t put your dreams on hold.
If you need retail or restaurant funding, do what many already have, consider a merchant cash advance.
Restaurant funding is getting increasingly more difficult to obtain especially if you approach a typical bank. We have all heard in the news that banks have been given billions in bailout funds to secure and stabilize the banking system which in turn should encourage banks to lend again which would stimulate the economy. That is great in theory but the reality is that small business owners and especially restaurants can’t get financing from a bank. Recently I was told by a bank representative of a very large National bank located in N. Carolina that starts with a W, that in order to get a loan you needed a 740 credit score or higher. Compare that to two years ago when 640 was acceptable. He also told me that they would have to provide two years of tax returns and needed to show increasing sales year over year. That alone alienates about 90% of all businesses in the US. How many had an increase over last year? Two years ago you could get a loan with stated income which means you didn’t have to prove it and no tax returns. Wow, have things changed. If you are going to try the bank loan route, be prepared to bring your tax returns, personal financial statements, great credit, your first and second child, and a lot of begging. And after giving it your best shot, you too may very likely go to the mailbox in three weeks and open the dreaded letter with the word Declined stamped on it.
So what do you do if you own a business, your name is not Gates, and you need to fund expansion, buy inventory, or whatever else you do in the normal course of running a business?
There is another option. It is called a merchant cash advance or business cash advance and is becoming an extremely popular option largely due to the fact that banks are just unwilling to lend money. Not to mention the fact that it is also a much easier process. There is very little paperwork and the benefits are many. There is no personal guarantee required, no collateral, and poor credit above 520 is typically ok. Oh, and you can get the funds typically within 7 days. There are lots of differences between companies so make sure you choose wisely and don’t put your dreams on hold.
If you need retail or restaurant funding, do what many already have, consider a merchant cash advance.
Looking for Business and Merchant Cash Advance
If you are in business for yourself, accept major credit cards, and have been looking for fast small business loans, there may be another answer. It is becoming an ever increasing popular alternative to a bank loan. Qualifying for a bank loan more often than not resembles the little dog in a tutu at the circus jumping through hoops. Fortunately for the dog, he usually gets a nibble of something good for his efforts. Often with a bank we are left with nothing except exasperation after spending hours meeting with the banker, filling out paperwork, calling our accountant to prepare financial statements, providing tax returns, and the list goes on to only get the dreaded decline letter in the mail four weeks later.
It could be out of convenience, frustration, or for the fact that banks are declining most applications, that merchants are turning to merchant cash advance companies for alternative funding. It can be called several things including a business cash advance but in general how they work is the same. Specifically how they work is very different, but that is for a later discussion. I will give you an example in a very general way. If your business accepts credit cards as a form of payment then you have a source of revenue that has assumedly been going on for a while and if history is a good indication of the future, it will continue. The funding company will look at your previous month’s statements. Some request four months but in today’s economy it is very common to expect them to ask for twelve months. The more comfortable they feel that you will still be around and that you can repay this, the more likely they will provide you with the funds you need.
How does it work?
The actual description that companies use is “a cash advance is a purchase today of future credit card sales at a discount”. Got it? Sure. Let me put it in simpler terms. Let’s assume you have a job making 50,000 per year but you have something that you want to do that requires cash immediately. Let’s say you need 10,000 tomorrow to put a down payment on a dream house that you absolutely have to have. You explain this to your best friend and he is willing to give you the 10,000 right now but you will have to repay him 12,500 over six months. And instead of you having to write him a check, your employer will deduct a small percentage of your weekly check that will go directly to him. All those little deductions will add up to the 12,500 you agreed to pay back. Once it reaches that total the deductions automatically stop. That is it! That is how simple in concept a cash advance is and may be a solution to your needs.
If you are at a breaking point with your bank and need a simple alternative, strongly consider a merchant cash advance and leave the dog tricks for the circus.
It could be out of convenience, frustration, or for the fact that banks are declining most applications, that merchants are turning to merchant cash advance companies for alternative funding. It can be called several things including a business cash advance but in general how they work is the same. Specifically how they work is very different, but that is for a later discussion. I will give you an example in a very general way. If your business accepts credit cards as a form of payment then you have a source of revenue that has assumedly been going on for a while and if history is a good indication of the future, it will continue. The funding company will look at your previous month’s statements. Some request four months but in today’s economy it is very common to expect them to ask for twelve months. The more comfortable they feel that you will still be around and that you can repay this, the more likely they will provide you with the funds you need.
How does it work?
The actual description that companies use is “a cash advance is a purchase today of future credit card sales at a discount”. Got it? Sure. Let me put it in simpler terms. Let’s assume you have a job making 50,000 per year but you have something that you want to do that requires cash immediately. Let’s say you need 10,000 tomorrow to put a down payment on a dream house that you absolutely have to have. You explain this to your best friend and he is willing to give you the 10,000 right now but you will have to repay him 12,500 over six months. And instead of you having to write him a check, your employer will deduct a small percentage of your weekly check that will go directly to him. All those little deductions will add up to the 12,500 you agreed to pay back. Once it reaches that total the deductions automatically stop. That is it! That is how simple in concept a cash advance is and may be a solution to your needs.
If you are at a breaking point with your bank and need a simple alternative, strongly consider a merchant cash advance and leave the dog tricks for the circus.
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