Merchant Advance - An Alternative Method for Obtaining Business Loans
By: Daniel Samoohi
Submitted: 2010-08-30 15:07:34 | Word Count: 426
Comparable in nature to a small business loan, a Merchant Advance is funding a merchant receives for different purposes that is necessary to be paid back within a six to 8 month duration depending on how much funding is attained. Merchant Advances are becoming more and more utilized as local banks are adding to their necessary stipulations for small business loan approval.
Distinct to conventional bank loans, Merchant Loans do not stipulate for good credit. As a matter of fact, if you were denied by the conventional banks and need access to working capital in a short amount of time, a business cash advance may be a perfect solution. As a small business owner would expect, the stipulations put upon such cash advance products generally include higher interest rates since the advance company is taking on a higher risk.
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Some agreements allow the entrepreneur attach the repayment schedule to revenue levels of the business. This is very useful to a merchant that has large changes in transactions from month to month. Payment is ultimately tied to Visa-MasterCard revenues, allowing for smaller payments during slow months. This feature is extremely useful to those entrepreneurs who are seasonal in nature because a set payment each month is not necessary.
A Merchant Advance can be of particular use to those entrepreneurs who have not been open for long. To get a traditional bank loan or a loan from the Small Business Association, a small business owner may be asked to provide verification of collateral, an extensive business history and a credit report with perfect scores. When a small business owner is just starting out in business, this may not be possible, especially in today's economic situation.
Nevertheless,being careful is advisable when in the market for a Merchant Advance. It isn't unfounded to find ballooning payment terms, application charges and a required change to a specific credit card provider. Reviewing the fine print of any agreement is a must. For those small business owners who find themselves in need of money and have very little alternative options available, the business advance can be especially helpful instead of to waiting months for a traditional small business loan you probably won't get approved for.
Author Resource:-
Since early 2008 Daniel Samoohi has helped thousands of business owners in finding credible providers in order to compare offers for a Merchant Advance. By making lenders compete with each other, Daniel assists businesses in finding great bargains for a Merchant Advance.
