The Benefits Of A Merchant Advance Compared To Business Loans

For those in business for themselves, acquiring financing can be challenging. Without years of history, plenty of collateral and a nearly perfect credit history, banks are reluctant to loan money; this is where a merchant advance enters the picture.

A merchant advance is a innovative type of factoring predicated on future credit card receivables that’s way simpler to get than a normal loan from a local bank. Small business owners can most often get an advance between $5,000 and $250,000 per business location based on how much they process in Visa-Mastercard sales on a daily basis. Large stacks of paperwork are not required and this sort of financing is 100% unsecured.

Naturally, this simpler access to necessary funds does come with some conditions. The business will be required to show at least six months in business, including credit card processing statements that display their actual credit card receipts. They are going to have had to have processed credit cards successfully, sometimes for at least 6 months. While there’s more margin of error regarding credit worthiness with a merchant advance, a score of no less than 500 is usually what is required to get the advance. Not that much to ask is it?!

One of the greatest pluses for small business owners that is in the market for a merchant advance is the time in which it take to acquire the funds from the date of application to the date of closing. Quick turn around times of less than 7-8 business have been recorded as the industry standard if of all the parties involved in facilitating the transaction happen are cooperative. In addition, unlike a conventional bank loan, an advance offers an extremely flexible repayment terms necessary in today’s economic climate.

Repayment is directly tied to credit card receipts on a daily basis, meaning that if a business has a slow period they are not required to pay more than they are able, unlike a conventional bank loan that requires fixed monthly payments. This is what is referred to as the “Daily Capture” rate.

Any small business owner contemplating a merchant advance should look into the company with which they wish to work with and make sure they have a trustworthy and credible track record. The North American Merchant Advance Association (NAMAA) provides suggestions for best practices and tips for business owners who are looking for this type of financing. You can also check out them out at the Better Business Bureau at www.BBB.com and do a Google search as well to see if anything comes up. If you would like to take your required information gathering to the next level you may search The Rip off Report www.theripoffreport.com.

Dating back to early 2008 Daniel Samoohi has aided 1000′s of entrepreneurs find reputable providers in order to compare offers for a merchant advance. He also helps start ups as well as established businesses find great deals for credit card processing in order to accept credit cards as a payment method for their businesses.