Whether your small business is a start-up or fairly well established there will come a time when an infusion of cash is necessary. Maybe you want to do a big marketing push, or maybe equipment needs to be upgraded. Whatever the reason, as a small business owner, you're probably counting pennies at the same time you're considering options.
While loans may be a good idea, unless you can pay them back fairly quickly you may end up paying a significant amount of interest. Then, too, if your business is very new, you might not have the necessary credit or collateral to even qualify for a loan.
Fortunately, banks are not your only option. Nor are credit unions, or even the SBA. Instead, you should look into merchant cash advances. These are businesses that give you money based on your existing (or projected, with supporting evidence) credit card receipts. Advance amounts are available up to $750,000, although most are much smaller, and there are no credit checks, and no note to sign.
How is a merchant cash advance secured if there's no note? Most of these companies are affiliated with one or more credit card processing companies. In order to obtain an advance, you'll be required to have one of those companies (most of the time you get to pick which one) handle your credit card transactions. The company giving you the advance will be repaid by receiving a small percentage from every credit card sale you make until the advance has been repaid.
Funds from such an advance are generally released to you within 72 hours of approval, and the paperwork is pretty simple. Most cash advance providers require six or so months of your credit card sales, and a simple application form. Once your initial advance has been repaid, you can even request another, which will usually be approved more quickly.
If a merchant cash advance sounds too good to be true, remember this: the amount of money you can get is based on existing credit card sales, so if your business doesn't take plastic, you won't qualify. As well, you are agreeing to switch credit card processing firms.
Running a small business, whether it's established or not, comes with many challenges, but with a merchant cash advance those challenges can be met with ease.