All businesses, whether they are large or small, have one thing in common. They all need working capital to survive. Working capital is funding that keeps the businesses running even during tough times or start-up periods. A business owner can use capital for a wide variety of business-related purposes. He or she may use capital to purchase updated equipment and technology to increase customer service efforts. The business owner may use capital to make sure that employees are paid on time without complications. Additionally, the business owner may need to enter into partnerships with other businesses to acquire specialty services. Working capital consists of the funds that make completing those tasks possible.
Why Businesses May Not Qualify for Traditional Loans
Traditional business lenders turn down business owners for loans for a wide variety of reasons. One reason is length of operation. A traditional lender will want to see at least two years of profits before it considers offering a loan product to a business. Another reason that some banks turn down business loans is credit discrepancies. A business owner who has an employer identification number may still have to use his or her personal social security number to apply for loans. Negative credit information can make a traditional lender hesitant to help. Merchant cash advances are alternative options that newer businesses can request. They can provide an immediate solution for a business that needs capital to survive.
What Is a Merchant Cash Advance?
A merchant cash advance is a loan that uses future income as its basis. In other words, lenders who offer merchant advances look at a business’s earning trends and base their decisions on the likelihood of the trend continuing. They do not focus on length of operation. Instead, they evaluate the success of the business for a small period, and they help companies that show promise.
How to Qualify for a Merchant Cash Advance
The main factor that determines whether a business can qualify for a merchant cash advance is credit card sales. A business must earn a least $3,000 per month, and the revenue must come from credit card sales to qualify the business for an advance. The business does not have to have two years of history. In fact, a business that has been in operation for more than 30 days may qualify for such an advance.
The business must have at least one year left on the lease to qualify for a cash advance. The one-year lease makes the lender feel secure that the borrower will not disappear. Finally, a merchant cash advance lender is not as strict as a traditional lender is, but it still likes to see a certain level of creditworthiness. Therefore, a company that wishes to qualify will have to have a credit report that is free of open judgments and bankruptcies. Any business that meets those requirements can apply with a lender by completing an application. The business owner will have to prove the monthly income by providing the lender with six months of credit card processing documents and two months of business bank statements. A business that does not accept credit cards will have to furnish six months of bank statements.
How BCC Can Help
Business Credit & Capital is an organization that is dedicated to helping businesses thrive. The company offers funding to companies who wish to expand, grow and provide their communities with stellar services. BCC offers traditional cash advances, merchant cash advances, hybrid cash advances and more. An interested person can begin the process of requesting funds by calling 866-BCC-9922.