A lot of business owners are still not familiar with merchant cash advance as an alternative business solution when it comes to financing. Did you know that you can obtain cash advance using your credit card receivables even with poor credit?
Is your business eligible for a cash advance? Check out the following pointers to find out:
1. Age of business. Some lenders require that the business must be at least a year old to qualify. There are also merchant cash advance lenders that only accept businesses that have been in operations for at least 2 years. If you own a start-up business, you may need to wait a while before you can apply.
2. Visa/MasterCard credit cards. Since Visa and MasterCard are the two most widely used credit cards across the globe, merchant cash advance lenders usually accept businesses that process these two payments. If you are a merchant who accepts other types of credit cards, you must look for a cash advance lender willing to work with those payments.
3. No bankruptcy. While it is possible to obtain merchant cash advance despite bad credit, most lenders will decline your application if you have a record of bankruptcy less than a year old. If you have been discharged for two years or longer, then you should have no problem getting approved.
4. Minimum credit card sales. You must be able to meet the minimum amount of credit card sales required by a merchant cash advance provider. Take note that the amount of financing you can get will also depend on your total sales per month.
Tips for Merchants Who Want to Obtain Cash Advance
If your business qualifies and you have decided to apply for a merchant cash advance, here are some tips to avoid problems:
Avoid fraudulent transactions. Fraudulent transactions would result to disputes and charge-offs later on so it is very important to take all the necessary steps to make sure that your customer is the genuine owner of the credit card account.
See to it that your customers can easily reach you through your customer service number so you can address such issues right away before a customer takes the matter straight to the credit card issuer.
Check the lender’s background. Just as it is important to investigate when applying for a business loan, you should also make sure that you are dealing with a trusted merchant cash advance provider.
Although you are not applying for a traditional loan, you may still encounter unscrupulous lenders that offer cash advance to businesses. Acquiring merchant services from the wrong resource may cost you expensive fees and charges.
Read the fine print.Last but not least, you should study the terms and conditions stated in the contract. Get to know the exact fees you may incur and find out your rights and limitations when you sell your credit card invoices to a cash advance lender.
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About the Author:
Melanie James has spent the last 14 years working with businesses to implement quick, effective and inexpensive changes to their businesses to increase productivity and their bottom line.