Business Cash Advance – Fast And Easy In Today’s Rough Environment

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A Business Cash Advance is becoming increasingly widespread in today’s small business market. The present position of the economy and airtight credit needs are major contributors to the increase in funds advances. It is hard for businesses to get the funds that they need with the increasingly strict conditions for normal business loans. Merchant cash advances are a different avenue of obtaining funding for normal business necessities. So how does a business cash advance operate? Let us explain

Business cash advances are a service provided by a lending institution to a entrepreneur that receives credit cards, usually in the retail or restaurant industry. The merchant loan funding agent basically advances the entrepreneur a prearranged sum of money in exchange for a part of their future credit card transactions.

For example, let’s check out Jo’s Diner. Jo may not have necessary funds on hand to pay his workers or to buy new appliances for his kitchen. Say Joe needs thirty thousand dollars and he contacted a Merchant Loan lender for the money.

The agent would assess Jo’s past credit card statements and find out if he can be approved for the advance. They would determine an interest rate for the money advanced. The rate is usually higher than a traditional business loan because the advance is typically provided to merchants that don’t have the credit or collateral to get funds from a regular bank. If the cost for Jo’s advance is 30 percent then he would be getting the $30,000 and paying the agent 39,000 dollars in future credit card receipts.

The provider would get the $9,000 by taking a percentage of the daily credit card receipts the business takes in. Say the part the provider takes is eight percent of daily credit card volume and the merchant received ten thousand in credit card transactions for the day. The merchant cash advance provider would capture $800 (8% of the $10,000). This process would keep going until the lender received the entire $39,000. This payment process fluctuates with the cash flow of the business. The percentage will remain the same so if your business has a slow period, you will be paying less. This is a big selling point for the advance service. Conventional bank loans have a fixed payment amount, which could be hard to pay during slow times. A merchant loan has the feature to follow a change in business cash flow.

A business cash advance is a helpful alternative to a business loan. Some will believe 9,000 dollars is a steep amount to pay but the conditions a merchant must meet for a conventional loan is becoming increasingly difficult to get. A business cash advance is a way of receiving fast and easy money to meet business working capital needs.

Since early 2008 Daniel Samoohi has assisted thousands of business owners in finding credible providers in order to review offers for business cash advance. By making providers compete with each other, Daniel assists businesses in finding great deals for a business cash advance.

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