If you are a businessperson facing financial constraints, then, a cash advance can help you address some financial needs. This type of funding can help you achieve more than you can imagine. For instance, you can use it to market your business, increase your stock levels, and pay your employees depending on how much you get. Do you have a cash advance merchant in mind? Here are some aspects to consider when choosing a cash advance lender.
The duration you have in business
Different cash advance lenders require that a business be operational for a specified period before they become eligible for a cash advance. For instance, some will need you to be in business for at least one year. Other lenders might not be very concerned about this. Depending on how long have been in business, amount, and urgency, you can go right ahead and choose a merchant cash lender that suits you.
Urgency of the cash
Most cash advance lenders take a short period to process your applications. On the other hand, some may take longer. This is mainly associated with the number of documents required in order to approve your loan. It is good to have this in mind when making cash advance applications as it will help you plan accordingly. If you need the cash urgently, then, a merchant that will address you need on time without subjecting you to lengthy approval processes.
The amount you need
Different merchants have different capacities. However, most of them can give you a substantial amount provided you run a business. However, the amount you get depends on the business you run and the capital base. These factors indicate your ability to repay the loan in a way. Most lenders will be unwilling to lend borrowers who seem unlikely to pay. On the other hand, high-risk borrowers are also subjected to high interest rates.
Before a lending company gives you a cash advance, they may require you to present a statement showing your sales for a given period. This way the lending company will be in a position of determining your creditworthiness. If you cannot provide a statement or your business is seasonal, your chances of getting the amount you want will significantly reduce.
These are some of the many factors most financial institutions look at before financing a business. If you are used to taking business loans, you might be asking, what is a cash advance? This are loans offered by credit card or merchants that have a short repayment period.