There are some business who are in risk of their cash. There are those that are comparing and contrasting on all 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 an MCA is found to be a good option for any business that is in need of extra money. What you will learn below are some comparisons of an MCA and a regular bank loan.
Approval is Easier
If ever the credit history of your business is not entirely that good, you may have problems in getting an approval from traditional bank loans. This is because banks have strict guidelines and they dictate who they could lend some money to.
MCAs are in fact easier when it comes to getting approvals than regular loans. As long as your business accepts credit card payments and also debits, you likely are going to 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.
When you obtained a loan from a bank before, you definitely know that a particular amount will be due month after month scheduled on a certain date. If in case you fail to follow on the arrangement, you will surely end up getting heavy fees.
Through the MCA, the amount that you pay on every month is going to be based on your debt and credit card sales of your business. 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
If you are going to get a bank loan, you could end up worried on the APRs and also on the final payoff amounts and you may end up pressured in paying the loan as soon as you are able to save on interest.
Complicated things like these are not present with MCAs. When you get an MCA, you are then able to know your final payoff amount. There are however no advantages when it comes to paying the loan in advance.
Bank loans may require a collateral in the form of a personal property or your business. Failing to make the payments for the loan could result to a big loss. MCAs however are unsecured loans, so you will less likely lose some of your precious property.
Even though each business situation is really different, MCAs are however the best option that you could try for.