subject: Merchant Loan-cost Effective Options [print this page] As the lending climate has continued to remain constricted, small businesses that are starved for capital are searching for methods to find a merchant loan. Many customary avenues of lending have remained severely restrained while others have dried up completely.
Into the void has stepped a occasionally questionable cast of companies that claim to be a another choice for businesses that need working capital to survive going forward. The best option for any business is to apply for an SBA loan through a commercial bank. These kinds of loans have the best rates and terms available to small businesses. The downside to this equation is that it may take upwards of 4 months to be granted approval and occasionally 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 cheaper and are able to approve a wider range of credit scenarios. This type of loan, is known as Credit Card Receivable Financing. This business loan has the ability to work with a wide variety of credit scenarios as well as having no upfront charges or stipulations to switch credit card payment processors. Additionally, interest rates are normally 50% cheaper than their closest competitor, a merchant cash advance.
No matter where a business owner 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 types of loans are often just small, high rate, high fee loans that are approved 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 for any business owner who 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 disastrous position in the near future. With this in mind, business owners need to carefully consider such a move, and take care to read the details.
by: Neal Coxworth
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