In this article, we’ll define the two most common types of lines of credit used by Merchant Cash Advance companies: revolving and non-revolving credit lines.
There Are Two Different Kinds Of Loans Available
Revolving & Non-Revolving. Which One Should You Choose? If you’re considering getting a merchant cash advance, two main kinds of loans are available: revolving and non-revolving. But what do these terms mean? Well, in general, they refer to whether or not you have to pay back your loan in full each month.
A Revolving Line Of Credit
When you open a revolving line of credit with United Funding Group, your business is provided with a credit limit to purchase goods and services. This gives you flexibility in funding your business as needed, rather than having one lump sum of funds available all at once. Once approved for credit, you may request to draw on your line of credit up to your specified limit anytime within its terms. You may also choose to draw less than your full line amount each time, as long as you stay within the set limits for your term.
A Non-Revolving Line Of Credit
Another type of merchant cash advance is a non-revolving line of credit. This means that you don’t have to pay back every penny of your loan in one lump sum. Instead, you will be charged interest on only what you use, and are free to pay back as much or as little at any time. This type of MCA is perfect for businesses with seasonal highs and lows. It is also useful for helping keep small business owners out of debt by allowing them to make payments before they get there! Additionally, a non-revolving line of credit offers immediate access to funds instead of waiting 30 days for funds from a bank loan.
Step 1 – Choose An Appropriate Loan Type
While there are many different types of credit lines for business owners, you should choose a revolving or non-revolving line of credit depending on your needs. If you plan to use part of your loan right away and will be able to replenish it at some point in time, then revolve is most appropriate. If you’ll only need part of your loan immediately and don’t intend to use it all up right away, then non-revolving is most suitable.
Step 2 – Evaluate Your Borrowing Profile
It’s important to evaluate your borrowing profile before you start applying for a merchant cash advance (MCA). Some companies that provide merchant cash advances may look at whether you have other credit lines available, such as business credit cards or a line of credit with your bank. It is also important to make sure you have enough savings in order to meet your short-term and long-term financial obligations, including taxes and operating expenses. You will also want to look at how much net income you have coming in each month. After all, if you do not have enough money coming in to cover debt payments for your new loan, things can get complicated rather quickly.
Step 3 – Secure Reasonable Amounts
It is important to request a reasonable amount of money when applying for a merchant cash advance. Remember, you are using your business’s future cash flow as collateral. Try to get between $5,000 and $500,000. That should be more than enough to give your business a boost while being approved by almost every MCA lender in today’s market.
Step 4 – Get Pre-Approved Immediately!
Getting pre-approved for a Merchant Cash Advance is almost effortless; all you need to do is have your business credit card statements, bank statements, and tax returns in hand to ensure that your business is stable and profitable. You will also be asked for current annual gross sales receipts. Most lenders require that you have done at least $100,000 in annual gross sales before approving an MCA. If you want to get a quick pre-approval on your own, click here!
Contact United Funding Group, the Merchant Cash Advance Experts
With more than 25 years of experience in business, you can count on United Funding Group to help your small business grow. Our team is dedicated to providing advanced financing solutions tailored to meet your business needs, including merchant cash advances, accounts receivable funding, and inventory financing.
With a wide array of products and services backed by our industry-leading customer service, United Funding Group has become one of today’s most trusted sources for merchant cash advances. Contact us today to get started!