Some businesses are in a risk on their cash. Some are comparing and are contrasting all of the financing options available. You may go to the bank and apply for traditional loans, but you must never limit your thinking with only that. A merchant cash advance or an MCA is found to be a good option for any business that is in need of extra money. What you will learn below are some comparisons of an MCA and a regular bank loan.
Approval is Easier
If your business’s credit history is one which is not that good, you could find it hard to get an approval from a traditional bank loan. This is because banks have strict guidelines and they dictate who they could lend some money to.
MCAs are in fact easier when it comes to getting approvals than regular loans. As long as your business accepts debit and credit card payments, you will likely get an approval for an MCA. This is in fact because through an MCA, you will pay a portion of debit and credit card sales automatically towards the loan. The lender will likewise get an assurance that the case of you not repaying the loan is a lot lower.
If you have acquired a loan from a bank before, you certainly know that a certain amount is going to be due month after month on a particular date. If you will not follow from that arrangement, you will be hit with heavy fees.
Through the MCA, the amount that you pay on every month is going to be based on your debt and credit card sales of your business. If in case your business performs well, you are then able to pay more. If ever time is not so good, you are going to pay less. The loan payment is then always going to stay on your budget.
Knows What you Expect
When you plan on getting a bank loan, you may be worried on the APRs and on the final payout amounts and you may also end up pressured when it comes to paying the loan as soon as you save on the interest.
Complicated things like these are not present with MCAs. When you get an MCA, you are then able to know your final payoff amount. There are no advantages however in paying the loan in advance.
No Collateral Requirement
Bank loans may require a collateral in the form of a personal property or your business. If you fail in making the payments on the loan, this may result to a big loss for you. MCA on the other hand are unsecured loans, which will help protect to avoid losing some of your precious property.
Though a business situation is different, merchant cash advance is one of your best option.