Every business owner knows that credit is less available in today’s strictly regulated environment, and that, when help is sourced, terms can be very restrictive with rigid terms and high interest rates the norm. In reaction, many company owners are exploring non-traditional avenues to access their business finance.
The good news is that sourcing a business loan does not have to mean risking doing deals with suspect lenders. For example, MCA funding (which stands for Merchant Cash Advance), is becoming an increasingly popular means to obtain short-term credit due to its inherent flexibility and sensible repayment methods.
What can MCA Funding be used for?
MCA Funding is an option for many different kinds of business need. Some company owners make use of the facility to fund their business expansion plans, slashing the time it would normally have taken them to start generating serious profits. Other business owners invest in equipment or IT solutions to boost their productivity while some just need a small cash injection to plug a short-term cash flow problem.
Who is Eligible for a Merchant Advance Business Loan?
Eligibility for MCA funding varies across the finance business sector, but the majority of lenders base their decision on the current monthly turnover being generated by the borrowers business. This also forms the basis for deciding the maximum funds that they will be prepared to advance.
As an example, Speed Fund LLC sets the bar at $6,000 per month, high enough to ensure they are lending responsibly yet low enough to be accessible to many small businesses that would otherwise be frozen out of a business loan. Another important criterion which most MCA lender’s insist on, is that the business uses a card terminal for taking credit/debit payments. This is because of the innovative way in which MCA Funding repayments work. How Ever Speed Fund LLC does not require the merchant to accept credit cards , because they offer even more options for merchants to
Get the funding they need.
The Benefits of MCA Funding
With a traditional business loan, repayments are of a fixed amount over a fixed period. While some MCA providers (including Speed Fund LLC) will offer this option to those who prefer the budgeting advantages of this way of working, the usual method of repayment involves taking a percentage from daily card sales. In this way, repayments of the advance (and the fixed fee that is agreed for the loan) are strictly tied in to business earnings. If, after a borrower has received and spent their finance, business improves, repayments increase and the loan is settled more quickly. If, after the receipt of finance, business slows, repayments go down and remain affordable.
In addition, MCAs are not secured on any asset and the fee (i.e. anything over the initial advance) can be claimed as a legitimate tax expense. Taken together, these advantages illustrate just why the MCA is seen by many as the ultimate business loan alternative.