If your business needs fast cash, and you simply cannot wait for a loan company to approve your loan amount, the best option is to turn towards a merchant cash advance.
Yet for a businessman who hasn’t a clue about merchant loans, you might feel like a person who is being dunked into deep waters without knowing how to swim. Thus, before opting for a merchant loan, it is best to be prepared and understand the basics of these merchant advances.
Thankfully, you’ve come to the right place. This blog has contained required merchant cash FAQ’s that’ll help you understand what you’re getting into.
Q.1 Are these Merchant Advances Some Sort of Loans?
A merchant cash advance isn’t a loan; it is more like a sale. Your selected service provider will give you the required sum of money in return for your future credit card sales.
The condition for getting a loan is how well your company sales are likely to be. Depending on your credit score, your interest rate will be allocated. If your sales are more, your company will likely input a lower interest rate.
Moreover, the payment for your merchant loan will happen automatically; this means your service provider will deduct a portion of your sales without the involvement of payment coupon, invoices or billing statements.
Q.2 Can All Businesses be Eligible for Merchant Advances?
All businesses cannot qualify for a merchant cash advance. Only businesses that have to accept debit and credit card payments stand eligible for merchant loans.
Further, these businesses require having a minimum specified credit card sales, along with being in business for almost 9 months.
Further, these businesses need to provide a month-long bank statement along with having 6 months of processing statements, to qualify for a loan.
Q.3 What is the latest by Which a Business Returns the Advance?
The need for paying back advances is not there in merchant loans. The reason being, a fixed portion of a business’s credit sales are automatically deducted on a daily basis. This helps contain and manage sale fluctuations.
Q.4 How fast Can a Business Acquire Funds?
Once your selected company checks your credit score and finds that your business is capable of repaying the loan, your loan is approved. Following its approval, you can get your merchant loan in less than 3 days.
Q.5. What Happens When a Sales Fall?
A merchant cash advance is designed to accommodate fluctuating sales. So, suppose your credit sale in the first month is high, the amount deducted from your daily sales will be high.
However, in case, the daily sales are lower, then as conditioned the amount deducted will be considerably lower.
Q.6 What about varying Interest Rates?
Unlike normal banks that under court order cannot charge higher interest rates, merchant loan companies base interest rates on factoring. If your credit sales are high then there is a lower interest rate. However, in case, you’ve lower credit sales, these companies can charge higher interests.
Well, now that you are aware of the basic FAQ’s on a merchant cash advance, find a reputed service company today. Now, get fast cash, and achieve your business goals sooner.