5 Misconceptions about Merchant Cash Advances
If your business needs financing, it’s time to consider a merchant cash advance. This is a great alternative to a loan, especially for business owners without the high credit scores most banks require. With all of the misconceptions out there, you may be hesitant about merchant cash advances based on what you’ve heard.
Here are some common misunderstandings about merchant cash advances and the truth about how merchant cash advances really work.
They are not regulated.
Merchant cash advances have fewer regulations than traditional loans. That’s one of the main appeals. However, it’s false to assume they are completely unregulated and too risky to utilize. Merchant cash advances are regulated by the Uniform Commercial Code. This governing regulation decreases fraud and ensures only reputable companies are offering merchant cash advances.
They take a long time to get.
Getting a merchant cash advance takes significantly less time than getting a loan. Waiting for a bank could make or break your business during its time of cash flow needs. Unlike traditional bank financing, the application process for a merchant cash advance is quick and easy. This makes it the perfect option for your business if you need financing ASAP. Usually, applicants get accepted in just a day or two.
No one uses cash advances
Actually, cash advances are growing in popularity. Small businesses in all 50 of the United States have utilized merchant cash advances. They aren’t a new concept or the product of a failing economy, rather a unique financing option that has been tested over many decades. Small businesses have been trusting merchant cash advances since the 90s, and many small businesses have stayed in business because of them. A lot of these businesses were overlooked for loans and wouldn’t have had financing options if it weren’t for merchant cash advances.
The terms are too short.
With merchant cash advances, there is actually more flexibility on the amount of time it takes you to back the cash advance. Wholesale Payments Direct offers multiple repayment terms. Since the money is deducted directly from your point of sale terminal, making payments is easy! You won’t have to think about making sure your checks are in the mail. Repayments will automatically come out of your credit card transactions.
The interest rates are too high.
It is true that you can expect to pay a higher interest rate with a merchant cash advance than with a traditional loan. The payments are also tailored to your businesses’ sales. At times when your business is processing fewer transactions, your repayments won’t be as high. But then at times when your business picks up, your repayments will be a little higher. This type of payment plan is the most efficient way to pay back your cash advance.
When you can’t qualify for a loan, a merchant cash advance is the next best thing! In a lot of ways, it’s even better! Call Wholesale Payments Direct today to apply for a merchant cash advance.