FAQ: Choosing a Merchant Advance Company
Choosing the Right Merchant Advance Loan Company for You
Finding the best merchant advance loan company can be difficult, with so many different companies vying for your business and attention. You may have heard successful stories about businesses taking out loans, but the thought of securing a loan can be an intimidating one. A lender you can trust and who can guide you every step of the way will allay those fears and allow you to grow your business. Here are some important questions to consider when you are out seeking the top merchant cash advance companies in Canada.
What makes a cash advance different to a traditional funding program?
Unlike a typical loan agreement, a merchant advance loan is calculated based on monthly sales, monitoring credit card sales to track how much of the loan is repaid each month. Using the latest technology, a merchant advance loan will take into account slower months. So if your business is quieter in January, the payments will be smaller to help you manage; conversely, a busy and booming July will see payments increase to ensure your loan is paid off in ample time. It is one of the most flexible options for small business lending.
How do I qualify for a loan?
Your business usually needs to have been operational for at least six months to qualify, and must obviously accept payments via credit card so that transactions can be used to calculate your repayment schedule. There may be a minimum time that credit card payments have been accepted in for business e.g. 60 days/90 days/a year depending on the provider. This is so that the organization can calculate the best possible arrangement for your loan based on recent sales. Because of the flexibility of a loan offered by merchant cash advance companies, the agreement is often aimed at small to medium businesses. Top provides will normally ask that you have not filed for bankruptcy, but will generally be softer on credit scores than a typical loan. There may also be a minimum monthly sales figure to qualify, but again this varies from provider to provider.
What about my credit history and collateral?
Because your loan agreement is calculated based on current and future credit card sales, your personal circumstances do not fall under the spotlight as much as in a traditional loan agreement.
How quickly can I access funds?
A top merchant cash advance company can often make a decision on your loan the very same day. The flexibility and speed of application is one of the key advantages to a merchant cash advance loan, and makes it ideal for emergency funds, without the risk of taking out an unsecured loan. Some companies can arrange funds in under a week, including the application process.
What can I use my merchant cash advance for?
Again, flexibility is key here. A top, industry leading lender will ensure that you have the best possible advice and the right agreement to suit your own specific needs. A merchant cash advance could help to make improvements to your commercial premises or to purchase new equipment that is integral to your business. The speed of application also makes it ideal for emergency injections of cash; for instance, urgent repair work, a slowdown in seasonal business or staff shortfalls. A direct boost of finance at times like these can be the difference between a small business staying afloat or sinking.
How much money is available to me?
This varies from provider to provider. A premier provider of merchant cash advance loans will usually take into account your current monthly credit card sales. This will enable the lender to advise you on the best course of action to fit your needs and to guarantee that the loan will be easily manageable and repaid with the minimum fuss and impact to your business. A typical figure will be at least 100% of the monthly credit card and debit card turnover, as your financier will see this as a realistic figure that can be repaid. Finding the right level of finance for your own needs will involve researching various lenders to see what deals are available.
How do I apply for a merchant cash advance?
A first class lender will usually possess a quality website with clear instructions and a simple, concise online application form. Typically, forms such as these will take a matter of minutes to fill out your basic information and to see whether you qualify for a loan. In Canada, the approval rate for a merchant cash advance is around 95%, giving you a great chance to grow your business. Top financial providers will then be in touch directly to discuss your individual case: this will often entail the amount of finance available to you, advice about the nature of the loan and any other questions you may have about the process in general. A good lender will take into account your own circumstances to get you the best possible deal to make the biggest possible difference to your business, and to offer a flexible and hassle-free repayment model. Find out more about a merchant cash advance canada.
What else may I need to provide?
Formal identification, such as a valid drivers license, passport or identity card is a must. Along with sales figures and recent credit card sales, financial organizations will ask for recent bank statements. Check with your lender to make sure you have all the sufficient paperwork, as this will ensure a speedy application and approval process, and will grant you swift and easy access to your funds.
Can I apply for more funding after my merchant cash advance?
Absolutely! A great financial provider will probably want evidence that you can pay back the loan in reasonable time; typically this will be for around 50% of the initial loan being repaid. Many lenders who take out merchant cash advance loans in Canada return to this kind of funding, so finding a lender you can trust could be the start of a number of successful dealings. Be sure to check out this lending guide if you’d like more information on ways to finance your business.