If banks reject you because your credit is poor or the investment is too risky, perhaps it’s time to turn to alternative methods of financing your startup. One potential option to explore comes in the form of a merchant cash advance. Providers will offer a lump sum of cash in return for a percentage of future sales. Merchant cash advance companies funded businesses in 2013 with an estimated three billion dollars. If you need cash quickly and are willing to pay substantial interest rates, merchant cash advance might be right for your company. Follow these steps to acquire your advance:
The first step to determining whether a merchant cash advance will be the best option for financing your startup is knowing the benefits and limitations. For entrepreneurs with no collateral or bad credit, banks will turn you down. Fortunately, if you need cash quickly and efficiently, merchant cash providers will deliver on your request. Just be prepared for high premiums of 30% or more. Depending on the situation of your small business, you may decide to proceed to obtain a merchant cash advance.
2. Develop a Plan
After you’ve decided that a merchant cash advance is right for your small business, develop a plan of how you will pay back the money within the next year. Make this plan as detailed as possible with a realistic timeline. This plan is essential towards taking advantage of the merchant cash advance without letting providers take advantage of you. The danger with cash advances in the long term is accruing exorbitant premium. Avoid paying these rates for longer than a year or two at all costs by developing an honest plan.
3. Find a Provider
Now that you have your plan, go and get your merchant cash advance. Just like with banks, every provider will differ slightly from one another. Find the merchant cash advance provider right for your small business. If you need to consult an expert, be sure to visit Biz2Credit.com.