Cash Advance Merchant Funding
April 25th, 2012 |If you have a small to medium-sized business that accepts credit cards in payment for your products or services, there is a relative new merchant funding financial product available to you. This is an alternative method of obtaining working capital that your business needs and may not be available through more traditional business loans and other kinds of “secured” financing.
While the business advance owners credit is part of the evaluation review, it is not the deciding factor in qualifying for this program. In fact you may get approval even if you have bad credit. The reason for this is that it “isn’t a loan,” it is an advance on the income produced by your credit card customers.
One of the things you want to know is how much merchant funding is available to you. Typically amounts range from $5,000 to $150,000 or more. The amount you will qualify for will depend on the actual volume of monthly credit card business you do, among other things.
You will also want to know what interest you will be asked to pay. Merchant funding isn’t a loan, so the definition of interest doesn’t apply to this kind of financing. The amount you repay and the time to repay it will depend on your credit card sales.
What if you need additional financing? Merchant funding actually works more like a line of credit. As you pay back what you have been advanced, you will be eligible for additional funds. For example if you originally qualified and took an advance of $100,000 and have paid back $30,000, you will be eligible to receive another $30,000 if or when you need it.
Over time this will help to improve your credit rating and you will find it easier to qualify for more traditional types of business loans if you need it. This kind of merchant funding can help businesses that are having a challenging time surviving to continue in business until things can improve and the business is more able to support itself.
Every small to medium business owner would be well advised to check out merchant funding, and to apply to be evaluated for funds even before the need arises. To have merchant funding ready and waiting should the need arise is just good business.
