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Guaranteed merchant cash advance is now a reality.
Merchant cash advance is a form of receivable financing. It is not a loan! In fact due to the cost of the money if it were a loan the only state it would be legal is Nevada. The way it works is that a merchant takes an amount of money and agrees to pay back a set amount, the amount the merchant pays back ranges from 1.33 to 1.49 or for every $1000 you will pay back between $1330 and $1490. Payments are made through “split batching” a process that takes a portion of each days credit card purchases to pay off the set amount owed. The obvious benefit of this type of system is no monthly bills and in fact this is not a credit liability and is not counted in the income to debt ratio.
First Merchant Funding has pioneered a new program to fund those businesses whose owners cant even qualify for the relaxed underwriting requirements of regular merchant cash advances. With this new program only the merchants monthly statements are used to determine eligibility. The amounts available are not aggressive at first but after completing a cash advance successfully that merchant is offered more money on subsequent advances.
Merchant cash advances are not new; this type of funding source has been around for many years. While these funds are expensive they have several advantages over conventional loans. In general lenders want to see the Five “Cs” 1.) Capacity to repay, 2.) Character, 3.) Good Loan Condition, 4.) Capital in his/her business, and 5.) Collateral. It is not unusual for banks to require additional security for new businesses or business owners with less than perfect credit, and not unheard of to put a second mortgage on the family home to offset the risk to the lender. Merchant cash advances are completely unsecured; however, you do sign a personal guarantee. Historically this money has been very attractive to the restaurant industry. The First merchant program is exceptional in that it removes any barrier a business may have to these unsecured funds. Please do not think in terms of the traditional business loan, since the underwriting requirements are almost completely different and not present in the merchant cash advance.
Banks will always look at your past activities and current credit in determining your eligibility for a loan, First merchant funding provider focuses on your past, present, and future credit card transactions. The target market for these loans are usually business owners whose credit score is less than perfect. Thats why Im so excited to be writing this since a bad credit score is not a deciding factor in qualifying you. This is the main difference between this product and a traditional business loan. Furthermore, Merchant cash advance dose not require extensive documentation and oftentimes all you need is 4 months worth of statements, a completed application, and the phone numbers to your landlord.
Thus, you will find it much easier and faster to get a merchant cash advance than a bank loan, usually 24 to 48 hours compared to what could be months with a bank. Pre-approval are obtained within 1 hour. For most business owners, the approval rate of a business loan is very low even with SBA guarantees especially if you don t have excellent credit.
Drawbacks Of Not Having A Credit Card (Page 1 of 3)
There are very few things that are as ubiquitous as the credit card. This little rectangle of plastic can give us so much convenience, but to the unwary can also bring so much misery. Credit cards may be the easiest way to get a standby line of revolving credit, always available when you need it, but it can also be the fastest way to get mired in credit card debt. People may complain about credit card debt but everyone agrees that despite the risks, there are too many drawbacks to not having a credit card.
Credit cards as we know them today are relatively new and are continuously evolving. The major laws protecting consumers rights involving credit were passed in the mid-seventies. It may be timely that Congress is currently considering added measures to enhance consumer protection. Yet, for a long time, people were using credit cards as a convenience product rather than as loans. Many people paid their entire balance each month. Credit cards were not as essential then as they are now.
Banks do not make money if people did not carry balances since a grace period for purchases, where no interest is charged for one month, is usually standard. As far as banks are concerned, the best credit card customer is one who carries a balance each month after remitting the minimum payment on time. Credit card issuers got really creative and have managed to make credit cards a necessary part of daily living. They worked to have credit cards accepted in more and more establishments, and to have credit card holders understand the many benefits and conveniences that they stood to gain from using their credit cards.
In our times, credit cards no longer a luxury. If you travel, you need your credit card to book flight reservations and reserve hotel rooms. You also need credit cards to rent cars, to purchase gas, and buy products by telephone or online. Being without credit cards today would make your life as difficult as traveling by horse and buggy. Without our even being aware of it, credit cards have become a business standard.
A credit card is one of the quickest ways to build a credit history. When you apply for a credit card and you still have no history, there are credit card issuers that you can approach. These issuers specialize in providing credit card products to customers who, because they are still attempting to establish or expand their credit history, are generally evaluated as higher credit risks. Many college students, for example, fall into this category, along with those who have limited employment income, or otherwise have poor credit history.
Today, having credit is a necessity. An inexpensive, reliable new car costs thousands of dollars, and although most people may want to pay in cash, the reality is they will need a loan. The rates and terms of that loan will be determined by your credit history, which is easily obtainable from the credit bureaus throughout the country. If you have used credit wisely in the past and repaid previous loans on time, you will be in a favorable position. If not, the result will be a more costly loan with higher interest rates.