If you’re a Canadian business owner who has been denied a business loan, you’re not alone. This fate has been experienced by many an entrepreneur. Many business owners have learned, the hard way, that securing a loan from a bank can be pretty difficult. Bank loan officers expect a myriad of hoops to be jumped through.
They include having a strong credit score, owning something worthwhile for collateral and devising a comprehensive business plan. Being unable to supply any one of the above can mean the difference between securing funding and being denied. So what is the alternative? A merchant cash advance enables a business owner to secure funding without good credit, collateral or a business plan.
How does a merchant cash advance work?
Firstly, it’s important to note that a merchant cash advance is not a loan. It is not borrowed money. It is a payment for your future credit and debit card sales. So, in order to be eligible for a merchant cash advance, you must accept credit cards and debit cards in your store. The amount of the advance you are eligible for depends on the average amount of credit and debit sales you make each month.
That’s it! Your credit history isn’t checked, you don’t need to put any of your property on the line and what you do with the money is your business!
How is a merchant cash advance paid back?
To many, this is the best part about any merchant cash advance program. There is no repayment schedule! With a loan, you are required to make monthly payments. A minimum payment is due by a specific date each month. Interest accrues on the outstanding balance that hasn’t been paid off. If a payment is late, a late fee may be charged. It is also possible for the interest rate to increase. This makes payments harder to make and longer to complete.
With a merchant cash advance, payments are automatically made through your credit card and debit card sales. A small percentage of each transaction is used to make repayments. If sales are slow, so are your payments. If sales are good, your payments are made quicker. A merchant cash advance works with the ups and downs of a business making it easier to pay off over time. No interest ever accrues. Instead of interest charges, a one-time fee is charged for taking the advance.
How much does a merchant cash advance cost?
The answer depends on how much of an advance you receive. Each advance is unique. They are catered towards each individual business, based on its monthly credit card and debit cards sales. The key point to remember is that the one-time fee is attached to the amount of the advance. As soon as you receive the advance, you are made aware of exactly how much is required to be paid back in full.
No matter how long it takes for the advance to be repaid, you will never be requested to pay back more than the agreed upon amount. Again, there is no interest rate. There is no repayment schedule. There is no way to make a late payment!
Unity Payments’ merchant financing solutions provide fast, easy and secure working capital for any business need. It offers up to $250,000 in simplified and reliable funding. For more information or to get a free quote, please don’t hesitate to call us at 1-800-661-3761 or email us at email@example.com to learn more.