Some businesses are in a risk on their cash. There are those that are comparing and contrasting on all the financial options. You may go to the bank and apply for traditional loans, but you must never limit your thinking with only that. A merchant cash advance or MCA are good options for businesses who are in need of some extra money. Below are some comparisons between an MCA and regular bank loans.
Approvals are Easier
If your business’s credit history is one which is not that good, you could find it hard to get an approval from a traditional bank loan. This is actually because banks have strict guidelines and they also dictate as to who they lend some money to.
MCAs actually are a lot easier when it comes to getting approvals than that of regular loans. As long as your business accepts credit card payments and also debits, you likely are going to get approved for MCA. This is in fact because through an MCA, you will pay a portion of debit and credit card sales automatically towards the loan. The lender also could get guarantees that the chance of you not being able to repay the loan is lower.
When you obtained a loan from a bank before, you definitely know that a particular amount will be due month after month scheduled on a certain date. If you will not follow from that arrangement, you will be hit with heavy fees.
With an MCA, the amount of which you pay each month is going to be based with your business’s debit and credit card sales. When your business is able to perform well, you can then pay more. If in case time is not so good, you then pay less. The loan payment will then be staying on your budget.
Determine What to Expect
When you get a bank loan, you may end up worried with the APRs as well as with the final payout amounts and you could actually end up pressured to paying the loan as soon as you saved on interest.
All of such complicated things are taken away on MCAs. Once you get an MCA, you will then know on what’s your final payoff amount. There are no advantages however in paying the loan in advance.
No Collateral Requirement
A bank loan may need collateral through the form of your personal property or perhaps your business. Failing to make the payments for the loan could result to a big loss. With an MCA, these are unsecured loans that has low chances of losing your property.
Though every business situation is one that’s different, a merchant cash advance should be your first consideration.