Things happen in business. Even the most well-trained MFA cannot predict every outcome or eventuality. That’s a large part of the reason why 82% of businesses fail due to poor cash management.
The ability to secure is the #1 concern for businesses. Which is why we’re going to take a look at merchant cash advances. A merchant cash advance has an 85% approval rating, making it the highest approval rate of any type of cash advance.
We’re going to delve into what separates a merchant cash advance vs. a business loan, to help you decide which type of loan is right for you!
Merchant Cash Advance Vs. Business Loan: What’s The Difference?
Business loans and merchant cash advances are similar in many regards. That’s part of what makes it so confusing. They are very different in other ways, however, which is why make the distinction is important.
Business loans are usually set up to be paid back over a predetermined period of time. Due to their official nature, business loans are usually only available through official financial institutions like a bank or credit union.
Business loans are often only available to be used for very specific circumstances. These could include making renovations or purchasing new equipment, for example. Business loans can come in a number of configurations. A SBA loan or a loan without collateral are two common types of loans available for smaller or independently-owned businesses.
Because of their official nature, securing a bank loan requires a good deal of paperwork. Official lending institutions can have quite strict standards for who’s eligible to receive a loan. The official requirements alone make business loans unavailable for a wide number of businesses, perhaps due to an unconventional business model or lack of financial history.
A merchant cash advance is primarily meant for businesses that rely on cash and . Merchant cash advances have become much more widespread and prevalent in recent years, however, meaning that they’re becoming available for more business owners.
Merchant cash advances are usually offered based on your business’ volume. A cash advance is usually paid back as a percentage of your sales. It can also be arranged to pay back a merchant cash advance over a set period of time. This will often get you a better rate, as will having a more established credit history.
A merchant cash advance can often be had far more quickly than a traditional bank loan, which is one of their main selling points. If you’re a business owner who’s run into unexpected cash flow problems, you can look into these merchant cash advance solutions.
Looking For More Business Advice?
It’s never been a more exciting time to be a business owner. The excitement comes with its share of risks, however, and a whole lot of knowledge to keep track of.
Now that you know more about how to get a merchant cash advance, browse our to help make running your business as smooth and as streamlined as possible!
