When it comes to funding your business, cash flow can be everything. While you might have a perfect idea and even the business plan to make it work, if you don’t have the money to implement it, your business will fail before it ever has a chance to take off. There are plenty of different ways to fund your business, but one way that many entrepreneurs overlook are lenders and merchant cash advances. Learn more about these two methods in this article about using lenders and merchant cash advances for your business.
Choosing Between a Merchant Cash Advance, Borrowing from Family, and Traditional Business Loans
When you’re looking for funding to grow your business, there are a few options to choose from. You could go the traditional route and apply for a business loan from a bank. Or, you could ask family and friends for money. But what if neither of those options is right for you? That’s where lenders and merchant cash advances come in. A lender may be an option if you have collateral like real estate or vehicles. A lender will also provide lines of credit to businesses that need an infusion of cash while they await payments on invoices from customers. A lender might be more expensive than a bank but will provide more flexible terms and can often be used without affecting your personal credit score. With this type of lending, you’ll usually pay higher interest rates because lenders take on risk by making loans with no collateral.
Reasons to Choose a Borrowing Alternative
When you’re ready to start a business, you need to think about the best way to finance it. A lender or merchant cash advance can be a great option if you have bad credit, need money quickly, or don’t have collateral. Here are some things to consider when deciding if this type of borrowing is right for your business:
-Do you have bad credit? If so, a lender or merchant cash advance can be a great option because they don’t require good credit.
-Do you need money quickly? Lenders and merchant cash advances can provide funding in as little as 24 hours.
-Do you have collateral? You don’t need collateral to qualify for a lender or merchant cash advance.
-How much money do you need? It’s important to consider how much money you’ll need throughout the lifetime of your business. With lenders and merchant cash advances, there’s no limit on how long you’ll be paying back your loan. However, with loans from banks or other traditional lenders, there’s often a limit on how long you can take out the loan.
-What kind of interest rates will you pay? There are different types of interest rates that vary depending on what type of borrower you are.
How Does a Merchant Cash Advance Work?
A merchant cash advance is an alternative financing option for small businesses. With this type of funding, businesses receive a lump sum of cash in exchange for a percentage of future sales. This means that repayments are made automatically through your credit card sales, making it a convenient option for business owners. It also reduces the need to go into debt and provide collateral. There are no hidden fees with a merchant cash advance, meaning you only pay back what you actually owe and no more.
In some cases, repayment schedules can be customized to fit each business’s needs as well.
Merchant Cash Advance Fees and Cost
A merchant cash advance (MCA) is an option for business owners who need quick access to cash. An MCA is not a loan but rather an advance on future sales. The funds are repaid with a percentage of your daily credit card sales. MCAs typically have higher fees and rates than traditional loans, so they should only be used as a last resort. Before taking out an MCA, be sure to compare the costs with other financing options to make sure it’s the right choice for your business.
Pros and Cons of a Merchant Cash Advance
MCAs are based on your future credit card sales, so they’re easy to qualify for, and you don’t have to put up any collateral. The downside is that MCAs can be expensive, with high-interest rates and fees. You also have to be careful not to default on the loan, as this could lead to your business being shut down.
Finding the Best Deals
There are a number of things to consider when seeking financing for your business. Two popular options are lenders and merchant cash advances, but which is right for you? It depends on a number of factors, including the amount of money you need and how quickly you need it. Here’s a look at the pros and cons of each option to help you make the best decision for your business.
Pros: If you’re just starting out and need less than $100,000 in funding, then lenders may be a good option. They’re able to provide this type of capital fairly quickly and offer rates that are lower than those associated with merchant cash advances. Plus, many of them can be repaid over time in monthly installments that correspond with your income from operations – so there’s no balloon payment at the end.
Cons: If you’re in a period of reduced sales, the higher payback amount could do more overall harm than good because a factor is added to the payback amount for a merchant cash advance. The additional expense of repaying the merchant cash advance can reduce necessary revenues.
Let’s Get Started
You’ve got a great business idea, and you’re ready to take the next step. But before you can get started, you need funding. You may be wondering if a lender or merchant cash advance is right for your business. Here’s what you need to know to make the best decision for your business. First of all, there are two main types of financing options that are available to businesses: loans and merchant cash advances. A loan means you’re borrowing money from a bank or other lending institution at an interest rate set by them (you’re paying back more than you borrowed). A merchant cash advance means you’re borrowing money from a company like us that will pay you in full upfront with no interest charges and no monthly payments required. The benefit of getting a loan is that it’s easier to qualify for because most banks have strict lending requirements for companies that want capital.
Partner with United Funding Group
In these uncertain times, it’s more important than ever to have a reliable partner you can count on for funding, especially with a Startup business. United Funding Group has a long history of helping small businesses weather tough times. We offer a variety of funding options that can be tailored to your specific needs. So if you’re worried about how inflation will impact your business, give us a call. We’re here to help.
Contact UFG, Today!
United Funding Group provides funding for all types of businesses, regardless of industry. We provide merchant cash advances for many industries, including retail, service, restaurant, and real estate investment. Whether expanding your business or opening a new one, we can get you funded quickly and easily. Contact us today to learn more about merchant cash advances from United Funding Group, ufgfunding.com.