There are many differences between a merchant cash advance and a traditional bank loan, and technically a merchant cash advance bad credit is not a loan at all. It’s a cash advance against the future sales of the business it’s lending to. Taking this into account, what are the merchant cash advance interest rates?
Like any typical loan, the information we require to tell you the interest rates are as follows;
Once we have this basic information, we will be in a position to tell you the interest rates accurately. However, if you’re looking for interest rates as in a ball park figure, the only thing that we can tell you is they are higher than bank loans, and generally in the double digits. However, these double digits also depend on the various factors that are associated with the circumstances of the business at the time of the application. We do speak with business owners who want to know the interest rates before they have shared information related to their business with us. This is not possible for any financial institution to do, let alone private lenders. Merchant cash advances are small business cash advance loans. These loans are for many businesses a last resort, and a pretty sure option of funding. The processing time frames are extremely short and in most cases a few days, or even the next day funding. So yes under the right circumstances it does make all the sense to take it. Who should not apply for a merchant cash advance; Merchant Cash Advance loans are not meant for every small business, and these are generally easiest business loans to get. When business owners are shopping around for business funding, they need to understand how to do this to best accomplish their requirements. Typically there are businesses that are simply shopping around for the best deals available, based on interest rates and there are business who require funding regardless of interest rates. An MCA with its higher interest rates (as compared to banks) is designed more for the latter, business that require immediate funding regardless of interest rates. As we have mentioned these are not business loans, these are business cash advances bad credit designed to suit specific business purposes. Sometimes we come across those who are looking for the ease of funding provided by private lenders such as ourselves, with a combination of term loan features and benefits. Ideal circumstances to take an MCA The ideal circumstances to take an MCA are as follows; a business that requires cash for a short period of time. This is because the MCA is only for a period of 12 months. If the requirement of the loan is for a shorter duration of time than 12 months and for a very specific purpose, then a cash advance suits your requirements very well.
For those who are shopping around for a loan with the lowest interest rates and the longest duration, and are not in immediate requirement, an MCA is not the best option. For business owners who can wait and as a result shop around for the right kind of loan, a term loan with the bank is the best option. The requirements of banks is different and best explained by the bank. Why take a merchant cash advance for your business; The primary reasons related to under what circumstances to take a merchant cash advance is mentioned above, however what we’re touching upon here is not the reasons but the decision to take an MCA. MCA funding is far easier to obtain as compared to bank loans. It’s almost sure funding, provided a business owners application has been rejected by the bank. Under these circumstances a business owner knows that if they really require the funding then this is the best option for him or her. The correct mindset to take a merchant cash advance is ‘I need the funding, and need it now’. If this is the way you’re thinking then yes, this is the best option for you. An MCA is easy business loans and that makes it one of the best options for small business owners. One of the biggest advantages of taking a merchant cash advance is because, most that apply qualify for the funding. The big feature here is qualifying, with an MCA most qualify. With a bank loan most small businesses do not qualify.
Criteria for a merchant cash advance funding; The criteria for a merchant cash advance is as follows and these are completely different from the criteria of banks.
These criteria are simple and most small business are easily able to meet these. There are certain business types that are well suited for this form of capital business funding. Factors that affect the MCA interest rates The credit score does affect the interest rates of the fast business funding and this is due to many circumstances. Typically, the worse the credit score the higher the interest rates, we do not deny funding based on poor credit scores likes banks do. Other factors that affect the interest rates in a positive way are as follows;
With these features working in favor of the business owner, he or she will get better interest rates, as compared to those who have poor deposits, revenue and erratic deposits. When applying for an MCA a small business owner should have no illusions about what they are applying for. While this form of funding is very beneficial to some business owners, it is not compared to bank loans of any kind, and is very different from any form of bank loan. There are many businesses that are ideal for merchant cash advances, and if you feel that your circumstances and situation is perfect for an MCA then contact us. Our funding team will provide you with the information you require and assist you with the application process. Alternatively you can fill in your basic information by clicking on the ‘apply now’ tab.
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AuthorThis article was written by John Smith for Funding Easily Archives
October 2018
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