Some businesses are in a risk on their cash. There are some who compares and contrast all of the financial options. You can in fact just go to the bank and apply for traditional loans, but you should never limit yourself to only that option. A merchant cash advance or MCA are good options for businesses who are in need of some extra money. Below would be some comparisons of an MCA and regular bank loans.
Approvals are Easier
When you have a business credit history is not that good, you may have problems in gaining an approval for traditional bank loans. This is actually because banks have strict guidelines and they also dictate as to who they lend some money to.
MCAs are easier to get an approval compared to regular loans. As long as the business is accepting debit and credit card payments, you will likely get approved for MCA. This is in fact because through an MCA, you will pay a portion of debit and credit card sales automatically towards the loan. The lender will likewise get an assurance that the case of you not repaying the loan is a lot lower.
If you have obtained a loan from the bank before, you know certainly that an amount will be due month after month on a certain date. If you ever fail in following the arrangement, you could end up getting heavy fees.
With an MCA, the amount of which you pay each month is going to be based with your business’s debit and credit card sales. If ever your business performs well, you could then pay more. When time is not so good, you then will pay less. The loan payment then will always stay on your budget.
Knows What you Expect
When you plan on getting a bank loan, you may be worried on the APRs and on the final payout amounts and you may also end up pressured when it comes to paying the loan as soon as you save on the interest.
These kind of complicated things are in fact removed from MCAs. Once you get an MCA, you will then know on what’s your final payoff amount. There are however no advantages when it comes to paying the loan in advance.
No Collateral Needed
A bank loan may need collateral through the form of your personal property or perhaps your business. When you ever fail to make the necessary payments for your loan, it could end up with a big loss. With an MCA, these are unsecured loans that has low chances of losing your property.
Even though each business situation is really different, MCAs are however the best option that you could try for.