Two Reasons To Choose A Merchant Cash Advance Over A Traditional Loan
All business owners understand the reality that it takes money to make money. Unfortunately, access to capital isn't always as simple as withdrawing money from your business's bank account. Although a large number of business owners turn towards traditional loans when they need money, a merchant cash advance offers an excellent alternative. Make sure you aren't overlooking the benefits a cash advance can offer over a traditional loan.
No Collateral Necessary
If you've ever tried to acquire a loan, you know all about collateral. Many large banking institutions will require that you put up an amount of collateral that is equal to the amount of money you are requesting. This can be challenging. First, if you aren't able to come up with the collateral, you can get the loan. Even if you can, gathering all the necessary documentation can be a time-consuming process that only prolongs the amount of time it takes to get the cash in hand.
With a cash advance, there is no need for this. Cash advance lenders use your past transaction activity as a way to determine what amount of an advance you qualify for and will be able to easily pay back, eliminating the need for collateral.
No Credit Impact
Another quarrel that traditional loans bring along is an impact on your credit. As a business owner, you understand just how important it is to keep your credit intact as poor credit can reduce your ability to get credit or even enter into certain business partnerships. Traditional loans impact your business credit in a number of different ways. Not only does it appear as an open account, but it adds to your report debt load.
If you were trying to open another location and needed to lease or purchase another property, a high debt load can serve as a blockage. Even if the loan amounts are small, having multiple open loans can make you appear as a higher risk. The great thing about a cash advance is that it is nothing more than a sales transaction in terms of reporting. There is no impact to your credit. Even if you regularly receive a merchant cash advance, your credit will not be impacted.
If your business needs extra capital, you can get it without the hassle of a traditional loan. With a cash advance you can get the money faster with little long-term effect on your business. Contact a business, such as Payday Express, for more information.