fbpx

If your business is young and its initial phases, it needs more funding to invest in new storefront, purchase assets, and several other purposes. You might be thinking about the funding aids that you can use to get the cash.

Both business credit card and merchant cash advance (MCA) make the reasonable options. However, deciding which funding alternative is right might be overwhelming; especially if you are a startup. The article, in this regard highlights the defining features of both the options so you can make an informed decision.

Merchant Cash Advance vs. Business Credit Cards

Understanding Merchant Cash Advance

What is important to understand here is that merchant cash advance is different from a commercial loan. Instead, a MCA process involves a lender who purchases a portion of entrepreneur’s future credit card sales and provides him/her a fixed-rate payment.

Business owner then remits a portion of daily credit card sales to repay merchant cash advance directly to the funder.

This feature sets MCA apart from business credit card as business owners do not need strong credit records to receive the funds. All they need is to provide MCA brokers with their bank statement to show that business is excelling and making profits. Businesses might need to submit some more related documents to apply for funds from MCA.

Understanding Business Credit Cards

Business credit cards work like personal cards in many ways. However, banks issue these credit cards to the businesses rather than directly to the people. Business owners get a credit line when they receive a business credit card. The credit limit on the business credit card can go up to $50,000, depending on the business success, its credit scores and plenty of other factors.

Like personal credit cards, business owners get an APR  with business credit card. It determines and estimates the interest rate a business has to give if it fails to pay off the credit completely when billing cycle ends. This limit is approximately 15 to 20 percent, depending on the bank a business owner has chosen. However, know that businesses only pay interest if they do not repay their credit amount in full.

 

 

Merchant Cash Advance or Business Credit Cards- Choosing the Right One

 

Choosing between business credit cards and merchant cash advance depends on the credit score and credit line you have. Not only this, there is a myriad of other factors that are important to consider when you choose the most suitable funding option for you business.

If you want some extra perks and reward points, and have sufficient cash-flow to pay credit each month, business credit cards make a good option. But remember that if you miss out a payment for any reason, it will be added to your interest.

However, if your business does not have good credit and you need a flexible funding solution to get cash for running operations or maintaining cash-flow, MCA is the right option. It suits the needs of young businesses as they do not have the best credit scores.

Final Verdict

Regardless of the option you select, it is important to consult professionals. Alternative Funding is a merchant cash advance broker that has years of experience in the relevant field of business funding and we can provide you with the best funding solution for your business needs. Thus, contact the experts to explore your business funding options.

When it comes to looking for a safe and viable financial alternative for business, merchant cash advance makes an innovative solution. Although the concept has been around for quite a long time, it is becoming popular with the leisure sector and many retail businesses. Simply put, the merchant cash advance is an option to utilize the card terminals to help businesses secure their lending.

That is what makes it ideal for businesses that do not have many assets but work with a good volume of monthly card transactions. Businesses can make repayments as a proportion of profits and revenues. That makes merchant cash advance not only a quick but also a convenient funding solution for plenty of SMEs. If you take the services of reliable merchant cash advance brokers like Alternative Funding, reaping the benefits of this financing solution becomes easier and hassle-free.

Let’s delve into the details to find out what makes merchant cash advance a safe and practical solution for businesses.

Why Merchant Cash Advance is Safe and Viable

·         Scalable and Easy Finance Solution

Many businesses make repayments as per the percentage of their revenue. These repayments fluctuate proportionally with the income. That means if your business is making profits and have a steady cash-flow, you can pay back a good amount each month. However, if the business is experiencing a rough patch, you can pay a small amount.

Unlike fixed payments, it makes a good arrangement for the businesses, and they have the reassurance that they can pay back even if they are not making consistent revenues.

·         Flexible Repayments

Another benefit that makes merchant cash advance a viable option for your business is its flexible and easy repayments.

In other words, the merchant cash advance makes repayments relatively painless. It happens because both lender and card terminal holders work together. The percentage the card terminal providers take for your repayments does not go to your bank account. They take repayments at source – same as people pay their income tax.

Unlike other finance options, in merchant cash advance, the broker takes the money until a business pays back its debt, making it a hands-off set up for the business owners. This is one way you can have more time to focus on your business instead of worrying about depleting finances.

·         Opens Ways for Different Types of Finances

Another important benefit of merchant cash advances is that your business can opt for a wide variety of finances at the same time.  With new lines of credit, businesses can avail of different opportunists to improve cash flow and make profits.

For example, if your business has an equipment lease, it is possible to apply for a merchant cash advance to boost the general cash flow of the company.

Bottom Line

Overall, a merchant cash advance is different from conventional lending solutions that may involve high-risks, especially if you are a startup. Easy and comprehensive funding provides personalized payment and finance solutions to speed up the working capital of your business.

Thus, contact the Alternative Funding to discuss your options and get the best guidance for your business funding.

Working Capital

We provide the entrepreneur alternative ways to gain access to working capital. Our flexible and affordable repayment options are designed to minimize the burden on your pocket!

Easy Approvals

Unlike a bank, we have fewer requirements for funding approval and we don’t base our decision on your credit rating. Contact us today to see how Alternative Funding can work for you!

Large-scale Funding

Your business is an expensive venture, imagine the peace of mind you’ll have with up to $1 million in unsecured capital available and ready for all of your financial challenges.

We Can Help You Move Your Business Forward

Get a Funding Partner

You’ve already done the hard work and started your business. Leave the rest to us. We have a fast approval process, and will have your funds deposited into your account quickly, sometimes in as little as 24 hours.

Fill out our online application. It takes just a few minutes to complete.

We’ll follow up with you to finalize the process and set up your account.

That’s it! There is no Step 3! *Your Funds will be deposited into your account immediately!

*Due to differing bank policies, it can several business days before your funds are available.

Our Application Process is Quick and Easy

In just a few short steps, we’ll have everything we need
and you’ll be on your way to accepting payments

99%

Merchant Approval Rating

About | Contact Us | Terms | Apply Now | Privacy Policy| Sitemap | Links

© 2020 Alternative Funding

1000 NW 65TH ST

Ste. 300B

Ft. Lauderdale, FL 33309

(888) 258-6279

Call Now ButtonCall Now