A Merchant Cash advance is a little utilized financial method that gives necessary working capital to business owners via their credit card processor. business owners realize that they have this option and go directly to family or a bank when they need money to pay for expansions, repairs or upgrades of their stock and equipment. If you are a business in need of money immediately, you should look into factoring as well.
The thought behind factoring is a bit like selling futures. You, as the business owner, agree to sell future credit card revenues at a lesser price to the factoring company. The money is received now in exchange for anticipated sales in the next several months.
These agreements are usually for the near term, rarely more than 1 year, and are a great way for a business with a verifiable credit card sales track record to obtain necessary money.
Unlike a conventional loan, where the repayment schedule is set for the life of the loan, a factoring arrangement takes into consideration the truth that in almost every business there are excellent months and bad ones. Your payment is directly tied to your credit card sales, as a portion, not a set fee.
If you have chosen to pay a ten percent daily capture and you receive ,000 one month, your payment that month comes out to 800 dollars. In following month you may take in 10,000 dollars and pay ,000. This flexibility is a great option for a growing company.
An extra benefit of a merchant cash advance is the speed in which the cash turns up in your hand. While a bank may take several months of decision making and tell you how you use the cash when and if they give it to you, with a factoring agreement, you will have the money in about a few working days, and you can apply it to whatever you see fit.