One business may benefit from a merchant cash advance or a factoring service more than others. The type of financing you go after depends on business practices and the industry you are involved with.
It may be time to seek a business cash advance. First, run down the checklist:
- Do you need an immediate cash infusion but are unable to obtain conventional financing at a descent rate.? If so, cash advances are usually easier to qualify for and quicker to receive compared to traditional loans.
- Are you seeking flexible repayment terms? This is another area where a cash advance may be a good fit. Terms in a cash advance are typically more flexible than traditional means and are open to renegotiation. They also usually need to be paid back quickly.
- Is credit holding you back? A merchant cash advance is not a loan so it will not affect your credit score.
- Do you have a steady, large or growing amount of monthly credit card sales? Many providers look at this to avoid default on the agreement.
- How large of a burden will the advance be on your business? If it is a significant burden at all, walk away. Remember, you pay a percentage of sales and as sales go up so does the repayment.
- Are you lacking collateral, such as property or equipment, in order to shore up extra funds? If you are seeking an advance this is not a problem.
A cash advance can appeal to any type of business depending on needs. A qualified provider should be able to help you with your specific needs.
It may be time to seek a factoring service. First, run down the checklist:
- Do you have large amounts in accounts receivable but need immediate cash? A factoring service purchase these accounts at a discounted rate, providing you with immediate cash.
- Do you have customers that are continually late with payments? Factoring services may be more than happy to buy these accounts from you and shoulder the burden.
- Are you prepared to sell off accounts with customers who have strong credit? This is good because it will reduce fees.
Factoring companies prefer only specific invoices and customer accounts in order to control a portion of receivables.
When you pass on the responsibility of collecting to a factoring service, you are detaching yourself from clients. Remember this and be sure the factoring service is professional in their approach. If they don’t deal with customer relations as well as your company, or the impersonal method of passing responsibility to another company, you may ultimately lose business from potential repeat customers.
Cash Advance Table of Contents
* Business Cash Advance Help – The Guide
* Merchant Cash Advance Terms
* Who is suited for a Merchant Advances or Factoring Services?
* Who Qualifies for a Business Cash Advance Loan?
* The Cash Advance System
* How Much Does a Business Cash Advance Cost?
* How to choose a Business Cash Advance or Factoring Provider
* Merchant Cash Advance Tips
