Merchant cash advance funding is flexible and monthly repayment amount varies with your business performance. While conventional bank loans force you to repay a fixed amount every month and charge you heavy penalties for missing your loan repayment due dates, merchant cash advance imposes no such conditions. You pledge a fixed percentage of your future credit card sales to the advance providers.

When your business is booming, you repay hefty amounts and smaller amounts when times are tough. Thus, a merchant advance does not strain your business, especially in difficult times by forcing you to repay hefty sums or incur severe penalties.

No personal guarantees required

A conventional bank loan requires personal guarantors who guarantee to repay your loan in case you fail to do so. Merchant advance providers ask you for no personal guarantees or collateral. They are only concerned with the credit card sales of business and not the business owner.

No personal credit at stake

Merchant advance does not put your personal credit and assets at stake in case your business venture is unsuccessful. It is treated as a purchase of future sales and not as a loan. Consequently, it has no effect on your future funding. Conventional bank loans with default risk and risk of exclusion from future funding cannot offer you these benefits.

Is a merchant cash advance really more expensive?

One argument against merchant cash advance funding was that it is more expensive than conventional bank loans. However, after the global credit crisis, cash-strapped banks now charge you comparable fees and interest rates than MCA providers.

With merchant advance you can receive funds for your business immediately, at lower cost, with minimal risk and fewer hassles. It offers greater benefits and fewer problems than conventional loans. It definitely represents the next chapter in commercial lending.

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