Merchants Can Raise Money In Tough Times
Over the past year, financing has become very tight for small business owners, with many traditional sources of capital drying up, such as Advanta, American Express Small Business and CIT to name a few. Recently, financing for large businesses has become somewhat easier to come by, as proxied by the stock market’s rise. Small business owners who compete on Main Street with the larger companies are taking a double-whammy, as their revenues suffer with unemployment at near record highs in the U.S., while at the same time, chain stores of their large competitors have easier availability to capital. When the recession fades and the economy begins growth again, this gap will still persist, we believe. What many small businesses owners do not know, is that there is a form of financing available to address this gap, even when corporate credit cards, lines of credit, business loans, unsecured loans and equipment financing is unavailable. This business loan alternative is called a Business Cash Advance.
Here is how a business cash advance (sometimes called a merchant cash advance) works. A business cash advance financing company will purchase a portion of a small businesses’ future credit card sales. In return for this purchase, the small business will receive a lump sum of cash, deposited into its business checking account. It is quite common for the small business owner to receive this money within a week of being approved. Most companies in this financing industry will offer a one-day approval process once receiving a completed application.
Pros and cons of Using a Merchant Cash Advance | Merchant Cash Advance Digest
October 3rd, 2009 at 8:58 am #
[...] This is a form of financing that can be used by small and medium sized businesses. Typically a merchant cash advance is structured as an asset purchase. The thing being purchased is typically future credit card [...]