Still finding it difficult to get your business approved for a bank loan? You’re not alone. Here is an alternative source of funding when the big banks say “No”.
At long last, the US economy is showing solid signs of recovery: inflation is slowing, household debt is shrinking, labor markets are slackening, home prices are rising, and consumer spending is rebounding. In the midst of all this good news, however, small businesses still report limited access to credit. A recent analysis of 1000 loan applications found that big banks approved 16.9% of small business credit applications in June 2013; that same study found that alternative lenders’ approval rate was 63.4% for the same month.
Access to cash is one of the most important factors for a small business’s success. Meeting weekly payroll needs, taking advantage of bulk inventory discounts, funding a renovation—all of these are perfect examples of why your business needs more cash. But the vast majority of small business simply can’t go to their local bank and expect to solve their cash flow problems.
Enter the merchant cash advance, or small business cash advance. With this alternative to an unsecured business loan, small businesses can receive an upfront payment for future, anticipated credit and debit card sales. Sales history; length of time in business; and, to a lesser degree, credit score all play a factor in the amount your business can receive from a merchant cash advance company.
Why Should You Consider a Merchant Capital Advance for Your Cash Flow Needs?
Every business is different, and merchant capital advances aren’t “one-size-fits-all” solutions. But if your business has a short-term cash flow management concerns, here are few reasons you should consider a merchant cash advance:
- The small business lending market is still tight, and has several barriers to entry. As just one example, they require collateral, which is often difficult for small businesses to supply, especially restaurants. And what small business owner wants to put his or her personal (or family) assets on the line to support the business?
- You need cash sooner than later. Maybe you’re counting on that influx of cash to make your next payroll, but the small business loan department takes weeks to make a decision. Or maybe you need cash on hand to support sales growth. Whatever the reason, merchant cash advance companies often make their decisions in a matter of days, rather than weeks, giving you access to the funds you need to keep your business up and running.
- You don’t have a business plan—and you can’t even think about spending the time writing one. Unlike traditional banks, alternative lenders like merchant capital advance providers have a simple, short, straightforward application process that doesn’t require extensive accounting projections or a business plan.
Finding the right merchant cash advance company may require some work on your part. You’ll want to find a reputable company with a strong business foundation so you can continue to rely on that relationship to take your business to the next level. As we continue to see signs of economic recovery, your business will be poised for continued growth and success.