There are some business who are in risk of their cash. There are those that are comparing and contrasting on all the financial options. You may go to the bank and apply for traditional loans, but you must never limit your thinking with only that. A merchant cash advance or an MCA is found to be a good option for any business that is in need of extra money. What you will learn below are some comparisons of an MCA and a regular bank loan.
When you have a business credit history is not that good, you may have problems in gaining an approval for traditional bank loans. This is because banks have strict guidelines and they dictate who they could lend some money to.
MCAs are easier to get an approval compared to regular loans. As long as your business accepts debit and credit card payments, you will likely get an approval for an MCA. This is in fact because through an MCA, you will pay a portion of debit and credit card sales automatically towards the loan. The lender also could get guarantees that the chance of you not being able to repay the loan is lower.
If you have acquired a loan from a bank before, you certainly know that a certain amount is going to be due month after month on a particular date. If you ever fail in following the arrangement, you could end up getting heavy fees.
With an MCA, the amount of which you pay each month is going to be based with your business’s debit and credit card sales. If ever your business performs well, you could then pay more. If in case time is not so good, you then pay less. The loan payment then will always stay on your budget.
Knows What to Expect
When you get a bank loan, you may end up worried with the APRs as well as with the final payout amounts and you could actually end up pressured to paying the loan as soon as you saved on interest.
These kind of complicated things are in fact removed from MCAs. When you get an MCA, you are then able to know your final payoff amount. There are no advantages however in paying the loan in advance.
No Collateral Requirement
A bank loan may need collateral through the form of your personal property or perhaps your business. When you ever fail to make the necessary payments for your loan, it could end up with a big loss. With an MCA, these are unsecured loans that has low chances of losing your property.
Though every business situation is one that’s different, a merchant cash advance should be your first consideration.