4 Reasons A Merchant Cash Advance Is The Wiser Option For Working Capital
Inescapably in the life of any corporation, there can be times when a sudden need for additional working capital is needed
. This money can come from a variety of resources, but they are definitely not all equal. Understanding the differences amid these sources gives you, the CEO, the ability to make the best choice to meet your monetary requirements.Friends and Family
Many corporate gurus suggest that the best place to get cash when you need it in a hurry is to talk to friends and family. Unless, you are willing to run the probability of alienating these people, don't! In every corporation there is the possibility that some things won't go well and you will not be capable of paying back the advance as originally thought.
Maybe worse is the perception people have that being they have loaned you the capital, they have a right to "propose suggestions" as to how to run your company. Keep your business life as separate from your personal life as you can.
Conventional Bank Loans
Although a typical bank loan provides a lower cost for the capital, there are several disadvantages in acquiring money this way. The problems arise from the strict requirements, elongated processing time, and restrictive oversight that comes with your loan. If you have outstanding credit, know accurately what you will use the cash towards, and want no flexibility in your repayment terms, a normal bank loan can in fact work out just fine for you.
If, on the other hand, you are a fairly new company, have little collateral, and need money fast for a nonspecific purpose, you can forget about a bank loan - they won't offer you a loan worth receiving.
Business Cash Advance
Before you despair, there are other options for finding the working capital you need. It is the strict guidelines of conventional banking that has given rise to new financing alternatives. Namely a merchant cash advance. When thinking of a merchant cash advance there are several things to consider. Your merchant cash advance specialist is in the perfect position to tend to any concerns you have and can offer you a sensible advance with manageable terms.
Any new company who takes credit cards as a payment method can turn those transactions into money in hand today. One of the several advantages is that once your balance is reduced by 70% you can apply for extra capital. If your last four months can show a constant flow of credit card sales, you may sell, at a discount, future credit card sales in exchange for needed capital now.
Best of all there are no individual entanglements, no long lists of forms to hand in, and you have the liberty to do what you desire with the funds once you have it in hand.
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