Running a business is hard work. Running a business without access to capital? Well, that’s just about as hard as it comes. As a new business owner, one of the biggest obstacles is getting access to funding and figuring out how to find working capital in a way that will help you be competitive and stay relevant. That’s where Merchant ReFi can help.
We are a direct funder specializing in fast working capital for small- and medium-sized businesses. Our merchant cash advance company offers a full range of financial products that are specifically designed to help your business succeed. If you are in the market for merchant finance, then you can count on us. We are dependable and hardworking — and we have the testimonials to prove it. From business capital loans to merchant loans, we have all the merchant finance options you’re looking for. Keep reading to learn more about the fundamentals of merchant cash advances, and then contact us today or apply online.
Advance vs. Loan
First things first: it’s an advance, not a loan. We have found that many applicants believe they are applying for a small business loan or another type of working capital business loan. In reality, they are applying for an advance on their business’s future earnings. Agreeing to this form of merchant finance means you agree to share a specified portion of your future revenue with the lender until the advance is fully paid off. Sometimes this is completed by granting access to the bank account to withdraw regular payments or by having access to the business’s ACH or credit card transactions.
Higher Interest Rate
Again, this is an advance, not a loan. With this distinction, you will typically see higher interest rates on merchant finance and funding than you would with traditional, run-of-the-mill bank loans. In contrast to these traditional loans, merchant finance isn’t regulated by the government. This means business owners could be paying between 30% and 200% interest on the principle of their advance. This isn’t necessarily bad if you, the business owner, know what you are getting into and you have full faith in the future success of your business. Be proactive from the beginning and know how much interest must be paid on the principle and what it would look like for your business to see success under these terms.
Immediate Access to Cash
One of the biggest benefits of merchant finance is the immediate access to cash that comes along with a merchant cash advance. In fact, when you work with Merchant ReFi, funding often arrives in as little as one day. Within days or even hours, business owners can generally find out if they are approved and get the amount of money they need. With traditional loans, the process is very different: you will wait for approval and then still potentially need to accept a lower principle amount depending on the bank’s requirements.
No Collateral Needed
Putting up collateral is one of the scariest and most overwhelming things a business owner may need to do to secure funding. With merchant advance, this is a thing of the past. Perhaps you lack equity in your home or business and therefore can’t put up collateral. You would be turned away from banks, but not from merchant advance capital. This is done by agreeing to share your future earnings with the lender. Banks have strict lending criteria that can be incredibly prohibitive depending on the circumstances; merchant finance allows you to overcome this by not requiring collateral.
No Explanation Needed
When applying for a small business loan or another merchant loan through a bank, you will often need to stipulate how exactly you plan to use the money. The bank may need to know whether you plan to pay taxes with it, purchase equipment with it, or what else you intend to do. Merchant cash advances offer you the freedom you deserve as a business owner. With merchant finance from Merchant ReFi, you can use the money any way you see fit — no questions asked.
Repay Through Credit Card Transactions
And, finally, repayment. As we have mentioned throughout this blog post, it is the repayment process that makes merchant cash and capital so unique (and beneficial to business owners). Here at Merchant ReFi, we collect repayments daily through your merchant account. Repayments begin after you receive the funds and will be repaid automatically through a percentage of your daily credit card receipts. This percentage is known as the retrieval rate or remit, and it can be anywhere from 5% to 20%. The percentage will be based on your credit card sales, repayment term, and the size of your advance. You don’t have to worry about missing payments — we’ll take care of it for you.
Get Help With Merchant Finance Today
Stop searching “how to find working capital.” You’ve found it in Merchant ReFi. Our merchant cash advance company is here to help you and your business succeed. You have the idea, dedication, and determination to make your business work … and we will be the merchant finance that helps make it a reality. Check out some of our other posts for inspiration and information about merchant finance:
- What Merchant Finance Is and How to Get It
- 6 Tips for Starting a Business: An Entrepreneur’s Guide
- 3 Steps to Improving Business Financial Situations
If your business acquires much of its revenue through credit card payments (restaurants and retail stores are a good example of this), then a merchant cash advance could be right for you as a short-term financing tool. Most businesses that receive approval have credit scores of 500+, annual revenues of $180,000+, and have been in business for 6+ months. If you have these characteristics, then the possibility of getting approved on the same day of your application or within hours of your application is reasonably good.