Merchant cash advances aren't cheap. Merchant cash advances aren't always the best choice for everyone. However, they are a legitimate alternative for businesses that have less than perfect credit or that need cash in a hurry. A poor borrowing history limits the places a business can go for loans and the result is either being turned down for the loan or getting a very high interest rate on the approved loan.
Some of the businesses that use credit card factoring the most are bars, restaurants, retail stores and service providers. In each case, the amount of business done with credit cards allows the investment factor to think about profit availability.
Getting an unsecured loan may be the only way a business owner can survive during tough times, but the owner should be careful because there are some less than reputable lenders out there.
A credit card factor will not necessarily look at a business owner's credit history or score as reason to decline the unsecured loan. They look at the history of steady credit card sales more than the business's credit score. And while banks may take several weeks or even months to approve a loan request, a credit card factor can approve a merchant cash advance in a matter of days.
All in all, it is a win-win relationship for both parties involved. Remember; if you do decide to use a credit card factoring company, you need to verify the legitimacy of the lender by as many sources as possible. You might consider checking the Better Business Bureau or asking for references.
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