Alternative Funding Options for your Business
Traditional banks aren't your only method for getting funding. If you don't want the hassle of dealing with the long and often tedious process of getting funding from your bank, you have other options.
Alternative Funding For Your Business
If you are a small business owner who is on the lookout for a business loan, consider applying for a merchant cash advance instead. It’s a smarter business funding alternative, with fewer requirements, flexible repayment schedules, and quicker access to funds. And although merchant cash advance loans are most often used for financing specific purchases, such as equipment and inventory, more and more business owners are now utilizing cash advance to acquire marketing resources, assist with growth, and expand their teams.
What is a Merchant Cash Advance?
A merchant cash advance loan, which is also referred to as an MCA, will allow you to garner funds as an advance against future sales. You pay a specific percentage of your sales through a garnishment to your transactions. This allows for a more flexible repayment solution as it allows repayment to happen organically. If your sales are down, your repayment requirements are lower, when sales are up, your loan repayment scales, allowing you to repay your loan faster.
A merchant cash advance is a good choice for alternative small business funding. First American Merchant, a reputable merchant funding provider, offers programs for every business no matter the industry, or size of the business.
Key Differences between Loans and MCAs?
A merchant cash advance and a traditional business loan have some important differences. In both cases, a merchant receive funds which are paid back incrementally until the loan or advance is paid in full. However, there is no legal definition for a merchant cash advance. This means it’s not considered a loan, and merchant cash advances aren’t reported to credit bureaus. This also means that credit requirements for loans are much less difficult to meet, with borrowers in poor or risky credit scenarios being able to acquire funding in situations where they would be denied a traditional bank loan.
The Rates of a Merchant Cash Advance
The rates of a merchant cash advance can vary and are based on multiple factors. In general, merchants are required to pay back between 10% to 35% on a per transaction basis, until the amount borrowed has been repaid. Some providers require rates as high as 60% of the amount borrowed, but these cases are more rare, and are conducive with the size of the business, the risk involved, and the terms of repayment.
If you are interested in an alternative funding option for businesses, consider turning to our partner, FAM. First American Merchant is a reputable merchant cash advance provider that specializes in merchants in both the high and low risk industries.
Want to learn more? Watch a quick video from our partner, FAM.
Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.
Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.
Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.
Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.
Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.
A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.
After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.
EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.