WHAT YOU NEED TO KNOW
A merchant cash advance and a business loan are two entirely different ways business owners can finance their business and obtain working capital.
The old, traditional meaning of a business loan usually meant term loans issued by banks.
Bank loans such as these are generally long-term loans and with low rates.
However, qualification process is not easy, takes a long time, and most applicants at the end still unfortunately get denied by the banks.
An online lender may also issue a short-term business loan that works almost like a cash advance, only instead of a percentage of your future credit card proceeds being debited by your credit card processor, a lender will debit your business account directly.
After a lender has reviewed your application and has approved your business for a small business loan, they will present an you with an offer with a specific dollar amount that has fixed regular payments until the loan has been paid off in full.
A merchant cash advance is not a loan.
Cash advance companies purchase your future credit card sales at a discount.
They advance you a lump sum of money when you need it, and the repayments will be a percentage of your daily credit and debit card sales.
Merchant cash advance providers use different criteria for underwriting during the application process than issuers of an old fashioned traditional loan do.
A traditional lender like banks and credit unions rely heavily on business owners credit history.
In most cases the minimum score needed to be a approved for a traditional loan is 640.
Remember when applying for bank loans, a lot more time will be needed to get approved or declined, criteria is a lot more stringent and be prepared to submit a ton of paperwork, as well as a business plan.
Merchant cash advance companies, on the other hand, will work with small business owners with less-than-perfect credit.
A minimum credit score of 550 is usually accepted.
Of course the higher the score, the lower the cost.
Cash advance companies look at how long a business has been operating for, monthly average deposits as well as the average credit card sales, if any.
Orumfy’s innovative platform takes the guesswork out of the equation.
We work with multiple merchant cash advance providers, ensuring you get the best rates and terms for your small business.
Create a free account here and immediately see how much you are pre-qualified for.
A Merchant Cash Advance, can be extremely beneficial to small business owners because it ensures that if a company has a slow day (or season) it will not have to continue dealing with a high fixed payment that comes with term loans.
There are several elements that make a merchant cash advance a unique financing solution for those looking to obtain working capital fast.
The funding process is simple and remittances are automatically made from credit and debit card sales
You can get access to your funds in as little as 1 day
There is no maturity date and no fixed payment amounts
You can get funding from $5,000 to $500,000 per business location
This financing can be used for any business activities
A Merchant Cash Advance can create a great opportunity to put your business back on track or take it to the next level.
A Merchant Cash Advance is a simple and flexible solution for small businesses to gain access to the working capital they need for growth or to handle cash flow emergencies.
Orumfy’s platform makes the process quick and simple so you can get approved and funded within 24 hours.
I can do it on mobile!!!
Not a lot of paperwork?
WOW! That was quick!