Options To Obtain A Merchant Loan
As the lending climate has continued to stagnate
, small businesses that are hungry for capital are hunting for ways to find a merchant loan. Many normal channels of lending have become severely reduced while others have dried up completely.
Into the void has stepped an {interesting|questionable] cast of companies that claim to be an alternative for businesses that need working capital to survive going forward. The best choice for any business is to apply for an SBA loan through a commercial lending institution. These types of loans have the best rates and terms available to small businesses. The {other side|downside] to this equation is that it may take upwards of 4 months to be approved and sometimes the application can easily run over 180 pages.
However, there are other options for getting a merchant loan that mean you can get the money much more quickly and are able to approve a wider range of credit scenarios. This type of loan, known as Credit Card Receivable Financing. This business loan exhibits the ability to work with a wide variety of credit situations as well as having no upfront charges or stipulations to switch credit card payment processors. Additionally, interest rates are normally 50% less than their nearest competitor, a merchant cash advance.
No matter where a business entrepreneur goes, they should be very careful about the number of signature, or personal credit loans that are online being advertised as a merchant loan. These sorts of loans are often just small, high rate, high fee loans that are based on a merchants personal credit, not the business. Additionally, such loans are typically not designed to meet the business repayment needs concerning cashflow and other considerations.
It is key to realize that prior any business owner takes out a loan that they need to consider where it will place the business in future. A loan that takes care of today's pressing need may also be the loan that puts a company in a financially precarious position in the near future. With this in mind, business owners need to carefully consider such a move, and take care to read the fine print.
by: Neal Coxworth
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