|
Sometimes flexibility is everything and nowhere is that more evident than when seeking financing for a small business. Large corporations are established, answer to a multitude of shareholders and operate in the public eye; they have rules that must be followed and any change is subject to a lengthy process before being acted upon. Small business owners, on the other hand, are agile and that’s why a merchant cash advance offers a superior alternative to borrowing through a bank. When a business is early in its development lifecycle, decisions are often made on the fly. Finances can be fragile. The first step that any small business owner should take in terms of ensuring their financial independence is to open a merchant account. Doing so gives them access to services like credit card and debit transaction processing, but also a source to turn to should cash flow be a temporary issue. Like big corporations, banks like rules. Rules make it difficult for things to happen quickly, without bureaucratic red tape or restrictions. While setting up a merchant account could not be more straightforward, working with a bank while trying to procure a debit machine or arrange for credit card processing can be time consuming and frustrating. Rules mean having to jump through the hoops of lengthy applications and credit checks. If a small business belongs to what the banks classify as a high risk category (adult web sites, telemarketers, pawn shops, mall kiosks, massage parlors and others), the hurdles at the local bank can be virtually unsurmountable. In most cases, a company like Merchant Account Providers can arrange for a merchant account without having to be put up with the bank’s caution. Ventures owned by individuals who have poor personal credit ratings also benefit from the more liberal policies and procedures that are aimed at making financial services more readily available to small business. One of the great advantages of opening a merchant account is the availability of cash advances, commonly referred to as a merchant cash advance. This product is an alternative to traditional bank loans and is superior in many ways. Instead of taking out a fixed term loan with fixed monthly payments (and having to go through the usual credit check and applications procedures), repayment of a merchant cash advance is based on a percentage of monthly credit card sales. If sales for a month are slow, there is no pressure to meet a loan’s minimum monthly payment; the cash advance repayment is adjusted downward to reflect the sales. Unlike a bank loan, there are no rules governing how the cash is spent. About The Author: Andy LeMarre is a small business owner who opened a merchant account when he first launched his own small business and needed to set up credit card processing capabilities. He was impressed by the business friendly attitude of the merchant account providers. After several months, he used a merchant account cash advance to finance an expansion.
Related Articles -
Merchant Account, Merchant Account Cash Advance,
|
