Getting a business cash advance is simple and easy for most small businesses, and even those with low credit scores. While this does not apply to bank loans, these are the requirements for private lenders, and private lenders are among the top funders right now.
Most business owners looking for financing and unaware of the current requirements and developments in the financial sector visit their local bank. This is the way people think you get a loan, through the bank. However, banks are not very enthusiastic about financing small businesses, and as a result, a whole new industry has sprung up to meet the demand.
Private lenders often fill the gap between businesses and banks. There is the very large segment of small businesses that are caught in the middle, that do not qualify for bank loans and yet require financing. Private lenders fill this void by providing many of them with the much-required business cash advance in the US.
Services provided by private lenders.
The financing provided by private lenders is generally known as MCAs or merchant cash advance loans. These types of loans are short-term loans that have a maximum duration of 12 months. Payment options are easy and flexible, and small business owners can work with their funder to establish the method that best suits their needs.
The application process for applying for a business cash advance it is simple and fast, the private financier generally requires basic information, and much less than those of the banks. The basic information required by private lenders to provide an MCA is listed here.
1. How old is the business?
2. The monthly gross sales of the business
3. How much do they require
4. Purpose of the funds, ie working capital, business expansion, inventory purchase, equipment purchase, etc.
5. Whether the business owner has other loans and is bankrupt.
These are some of the basic types of questions that a small business owner applying for an MCA must answer. The big difference between an MCA application and bank loans is the fact that banks require detailed information related to financial statements. Private lenders basically need a broad view of the basic realities of the business applying for the loan. Unlike banks, all decisions are not based on the statements of the small business.
While banks and private lenders may have a different way of looking at things, private lenders make sure to ensure that the basic realities of small business are as they should be. Banks rely heavily on financial statements when reaching a conclusion regarding the financing of a business.
Features of the MCA Loan Application Process
While you may be asked about your credit score even when you go to apply for private financing. Credit score is not a determining factor for an MCA. These loans are unsecured loans and as a result no collateral or collateral is required either.
When credit scores, collateral and values don’t hold back small businesses, the chance of getting financing is much higher. These are the basic weak areas of most small businesses, which hinder their ability to obtain financing in general. When these weak areas between a small business owner and the financing they are seeking are eliminated, the process becomes much smoother for them.
Warranty is something that most small business owners find difficult to show. Typically, only with a private lender can a small business owner expect to receive a bad credit business cash advance.
Another great feature is the fact that small business owners can also receive the financing they need very quickly. The fastest a business owner can receive money in his business account is 48-72 hours from the time he submits a completed application. At the latest, this time frame would be a week or two. Banks, on the other hand, are in no rush to provide business financing, and a realistic timeframe would be a couple of months to receive the money.
