A lot of times, the most stressful part of being an entrepreneur or owner of a small shop is acquiring the much needed capital to sustain the growth of the business. Entrepreneurship takes a lot of guts and calculated risks and more often than not, small businesses fail during the first 2 years roughly because of the lack of capital to stay afloat. Banks typically deny most requests for small business loans which makes it even harder for cash-strapped small business owners to compete with larger enterprises. The fact is that around 40 percent of small to medium-scale businesses succeed within the first five years – a data comparable to most startups with larger funding. Nevertheless, it can still be frustrating to find additional working capital.
The good news is that funding for a small business can still be achieved via credit card processing providers as a factoring agreement. Most providers should be able to qualify small to medium-sized businesses especially if they have been in the business for at least a year and passed a predetermined monthly minimum amount of credit card sales. These providers can dole out fundings ranging from a few thousand dollars up to half a million if needed. The merchant or business owner is basically selling his or her future credit card receivables at a discount.
Merchant cash advance is fast becoming a popular alternative to small business loans for several reasons. There is typically very little paper work involved and approval time is quick. After a business qualifies for a cash advance, the amount is repaid by way of credit card receivable percentage based on a daily capture rate which is mutually agreed upon by both the provider and the merchant before giving out the cash. This means that the repayment amount varies in any given period and is dependent on the merchant's sales volume for that particular time – no penalties, no surcharges, no due dates.
Most business owners – particular those running small retail shops, restaurants, repair shops, salons, and other similarly-sized endeavors will tell you one thing: as if running the day-to-day business isn't hard enough, anticipating when to require an additional capital is even more difficult. Banks and other traditional lenders usually decline small businesses with less than perfect credit rating even if they have a perfectly healthy cash flow and even if the merchant has an excellent credit score it can typically take months for a bank loan to be processed and funded while the business continues to suffer. A merchant cash advance provides a speedy solution for qualified businesses in need of additional capital. It's quick and easy to acquire and best of all, it requires no collateral.