As a small business owner, I know the importance of having sufficient funding. In the past, it was fairly direct to receive a sba business loan. These traditional loans required a sound business plan, weeks assigned to the approval process, and patience. There is no guarantee that you will be granted this loan, and it will take weeks for your business to receive the funds. This can be extremely unsatisfactory for you as a business owner because you apply for this loan hoping to receive monetary resources quickly for your ailing business. Over the past year, I have looked into multiple ways to fund my business. I knew that the recession was going to hinder my sales, so I needed to determine a way to secure the funds so I could keep my business afloat. After failing to secure a traditional loan from a local bank, I looked into another class of funding.
One of the new opportunities I discovered was a merchant advance. I did not have any experience with this method of funding so I did some exploring. This was not a source for start ups, which my business was not, so this was a non issue. I needed to have roughly three thousand to five thousand dollars in monthly credit card sales to qualify. Luckily, a majority of my customers used credit cards and I easily met this requirement. In my opinion, the best part of the merchant advance was the lack of restriction on the use of funds. I was not required to use these funds in any particular way. I did not have to determine to the lender what I was going to use these funds for.
Another vantage to this method was the repayment program. In essence, there was none. The lender would set up a deal with my credit card vendor to automatically subtract a percentage of my credit card batch. This would go towards paying back my loan amount. This was convenient because it would free me from keeping track of the repayment and eradicated the need for interest charges or penalties on late payments. I recommend this to any small business owner looking for some extra funds.