Funding Your Business With a Merchant Advance
As a small business proprietor, I know the importance of having adequate funding. Previously, it was fairly straightforward to receive a sba business loan. These traditional loans required a complete business plan, weeks designated to the approval process, and patience. There is no guarantee that you will be granted this loan, and it will take weeks for your business to get the funds. This can be extremely unsatisfactory for you as a business owner because you apply for this loan hoping to receive monetary resources quickly for your ailing business. Over the past year, I have looked into multiple ways to fund my business. I knew that the recession was going to hamper my sales, so I needed to find a way to secure the funds so I could keep my business afloat. After failing to secure a traditional loan from a local bank, I looked into another shape of funding.
One of the new opportunities I found was a merchant advance. I did not have any experience with this method of funding so I did some research. This was not a source for start ups, which my business was not, so this was a non issue. I needed to have approximately three thousand to five thousand dollars in monthly credit card sales to qualify. Luckily, a majority of my customers used credit cards and I easily met this demand. In my opinion, the best part of the merchant advance was the lack of restriction on the use of funds. I was not required to use these funds in any special way. I did not have to specify to the lender what I was going to use these funds for.
Another advantage to this method was the repayment plan. In essence, there was none. The lender would set up a deal with my credit card vendor to automatically subtract a percentage of my credit card batch. This would go towards paying back my loan amount. This was convenient because it would free me from keeping track of the repayment and eradicated the need for interest charges or penalties on late payments. I advocate this to any small business owner looking for some additional funds.