Business news and advise

For many small business owners, obtaining financing when they need it can be difficult. Without years of history in business, a huge amount of collateral and an a spotless credit rating, lenders are very reserved when it comes to loaning their funds. This is where a merchant advance proves useful.

A merchant advance is a specific type of financing based on future credit card sales that is much simpler to obtain than a conventional bank loan. A business owner can usually get a loan between $5000 and $250,000 per business location depending on how much they process in credit card sales on a daily basis. Heavy paperwork is not needed and this type of financing is completely unsecured.

Of course, this easier access to needed cash does come with some stipulations. The business will be expected to show at least 6 months in business, including processing statements that show their exact credit card sales. They will have had to have used credit cards successfully, usually for a minimum of six months as well. While there is more wiggle room on credit scores with a merchant advance, a score of at least 500 is a typical requirement as well. Not too much to ask is it?!

A great benefit for small business owners who are in the market for a merchant advance is the rate at that the request is processed. A turn around time of less than 7-8 business day is usually the norm with help of all the parties involved in making the transaction happen. In addition, unlike bank loans, an advance offers a much more flexible repayment schedule.

Repayment is directly tied to credit card receipts on a daily basis, meaning that if a business has a slow period they are not required to pay more than they are able, unlike a conventional bank loan that requires fixed monthly payments. This is what is referred to as the “Daily Capture” rate.

Any small business owner contemplating a merchant advance should look into the company with which they wish to work with and make sure they have a trustworthy and credible track record. The North American Merchant Advance Association (NAMAA) provides suggestions for best practices and tips for business owners who are looking for this type of financing. You can also check out them out at the Better Business Bureau at www.BBB.com and do a Google search as well to see if anything comes up. If you would like to take your required information gathering to the next level you may search The Rip off Report www.theripoffreport.com.

Since early 2008 Daniel Samoohi has helped thousands of entrepreneurs locate reputable companies in order to compare quotes for a merchant advance. He also helps start ups as well as established businesses locate great deals for credit card processing in order to accept credit cards as a payment method for their businesses.