The initial question a lot of people are asking is what is a merchant cash advance? An established business in existence for one year or more with visa and mastercard sales can qualfiy for a loan or a merchant cash advance on their past activity up to $150,000 from a financial institution and $250,000 or more per location from a true merchant cash advance company. The monthly average of their visa and mastercard sales x 1.5 will be a qualifying amount that the lender will fund up to. Here is an example for you, assuming your business averages monthly $50,000 for visa and mastercard sales over the last year. The financial institution will use that $50,000 x 1.5, therefore your lending base will be $75,000 for this example. Pretty neat, bet you didn't know these programs were even out there.
There are many merchant cash advance or loan programs available. Some are in a the form of a loan and others are in the form of a merchant cash advance but the formulas for lending qualification come from the past mastercard/visa sales. Merchant cash advance programs can lend up to $250,00 to $300,000 and their rates of interest can range from 25-40% per annum. Loans regulated by banks are controlled by the banking rules and usually charge lower rates. Obviously, it is important to compare the programs and understand your carrying costs, time to repay the monies back and any other risk factors that you might have.
Other questions to consider are the following, what kind of businesses qualfiy for these type of programs? The following is just a few that would fall under these lending qualifications:
limousine service, automobile centers, beauty and nail salons, dry cleaners, gas stations, retailers of all kinds, restaurants, bar/nightclubs, distributors,dental/medical offices and service providers.
The next question is what are some of features of these merchant cash advances and loan programs:
* Loans or merchant cash advances range from $5,000 to $250,000.
* No tax returns, Financial Statements or Asset Documentation required.
* Up To One Year to Pay back the loan, merchant cash advances between 6-8 months.
* No large fixed monthly payments, you pay a percentage of your future credit card sales so the monies are repaid with the flow of your business cycle.
* Fast Approval, Within two days. Funded within seven business days.
* No Hidden Charges and no late Fees.
* Poor Personal Credit Accepted. This is not FICO SCORE Driven, so credit is not an issue, Prior Bankruptcies No Problem.
* To Pre-qualify, you must own your business for at least one year.
* To Pre- qualify, you must average $3,000 monthly credit card sales.
The next obvious question, is how do we repay back the loan or cash merchant advance? It is from the future card sales, a small portion is paid back each day to pay back the lender. This is important because there are no balloon payments or monthly payments to consider. The lender calculates a small repayment per day that can last up to one year.
How low is the permitted Fico score? It could be as low as 500, but each situation stands by itself.
Additionally, as this loan or cash merchant advance is paid off, your company can reapply for additional funds and continue the process again. This is a great financing program for businesses that have seasonal cash flow or need to use the money for any business purpose, the decision is yours.
In conclusion, there are many different types of programs out there, be careful and compare the pros and cons of each one and see which one is right for your Company.
J.M Luna has over thirty years in the financial field. This includes accounting and taxes, leasing, hard asset money and working capital loans, and commercial lending. U.S Corporate Capital Leasing Group assists the start up and seasoned businesses in many different industries.
www.cclgequipmentleasing.com/cashadvances.htm
With literally hundreds of credit cards at your disposable, choosing the one that's right for your lifestyle can be a daunting task. You always want to ensure you get a credit card that meets your needs while offering the best rates and the biggest rewards. You can search dozens of local banks and lending institutions, scour the internet, or randomly select a credit card OR you can use our convenient online credit card comparison tool to find exactly the card that's best for you. Our credit card comparison tool will allow you to view credit card details side-by-side in an easy to understand cross grid. You can even select a card and approve online, in some cases being approved within minutes of submission! It truly is the smart way to shop for credit cards!
Print this page