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Thinking About A Merchant Cash Advance?
If you’ve never gotten a merchant cash advance before, you probably have some questions about how the process works, and the potential risks and rewards of working with a merchant cash advance provider. The truth is that merchant cash advances are growing at a double-digit rate as small businesses look for ways to shore up their cash flow, or get financing that banks and private lenders won’t provide.
Ideally, merchant cash advances work best for businesses that have a lot of credit card transactions. These businesses include bars, restaurants, retail outlets, and personal service providers like dentists and hair stylists. The cash advance, which is usually capped by the amount of monthly credit and debit card receipts, is paid back over time (often a period of months). A small amount of each credit card transaction is forwarded to the advance company to repay the advance. Normally, the advance is paid back as a percentage of sales volume, so when sales are down, the repayment amount also decreases.
This is great for businesses that need a healthy cash flow to remain in operation. Merchant cash advances can be used for just about anything – paying bills or taxes, shoring up cash reserves, covering unexpected expenses, financing an expansion or just about anything else you have in mind. There are no monthly bills to pay – the repayment occurs as credit card transactions are processed.
It’s important to understand the agreements you enter into when you accept a merchant cash advance. Most business owners who have gotten a merchant cash advance report that they are very satisfied with the transaction. Some businesses have an advance agreement that works like a line of credit, so they can draw on cash whenever they need to. Other merchants use merchant cash advances only for those occasions when they need cash immediately.
Rapid Capital Funding can help you secure a merchant cash advance for your business. If you’d like more information about how a merchant cash advance can work for you, contact Rapid Capital Funding today.
Photo Credit: Lotus Head
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Small Business Index Shows Confidence Eroded In January
According to the National Federation of Independent Businesses,
small business owners’ confidence in the economy and in their businesses dropped to the second-lowest level ever recorded by the NFIB in the organization’s 35-year history. The NFIB’s Small Business Optimism Index fell to 84.1, from 85.2 in December 2008.
The organization remains hopeful that signs of recovery will begin to appear in the second half of 2009, but acknowledges that any recovery is unlikely to begin through the second quarter of the year. In addition to the glum outlook for businesses, small business owners reported a significant decline in average employment in January, though capital expenditures remained steady in January, after falling five points in December. Nearly 60 percent of respondents reported a drop in profits in January.
The NFIB says that the number of deferred expenditure plans rose two points, but reports that owners aren’t making big plans to build inventories, and 20 percent fewer businesses expect to see their sales rise, an overall drop of 2 points. The outlook for expected credit conditions was largely negative, dropping fourteen percent from January. Four percent of respondents indicated that credit and financing are their single most important problems right now. Thirteen percent of respondents say that loans are harder to get now than in the past, and demand for loans is at a low.
The drop in loans could signal tough times ahead for some small businesses. Combined with tightened lending restrictions, some small businesses that would normally borrow to get through rough spots aren’t able to get the operating capital they need to stay afloat.
For some businesses, an alternative to a loan is a merchant cash advance. A merchant cash advance can put the cash you need in your hands right away, without the weeks or sometimes months of waiting that can accompany a traditional loan. Even businesses with less-than-perfect credit can qualify.
A merchant cash advance isn’t like a loan. Instead, it’s a cash advance on your future Visa and MasterCard credit transactions. Your cash advance is repaid as you take in new transactions. Nothing could be easier! Most advances are delivered in less than seven business days, and you can request an advance of up to 1.5 times your normal monthly credit card receipts. There are no restrictions on how the cash is used, and 95% of all applicants are approved for the advance.
If you need cash to keep your business moving, turn to a name you can trust: Rapid Capital Funding.
Source: NFIB
Photo Credit: Ben Earwicker
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Today’s tight credit market is causing franchisers to lend a helping hand to franchisees in need of financing.
“Great Clips Inc., a Minneapolis-based hair-salon chain, says it has secured $14 million in loans for expansions, acquisitions, debt consolidation and refinancing for new and current franchisees.
The franchiser obtained the money from lenders InSource Capital Services Inc. of Sherman Oaks, Calif., and IRH Capital LLC, Deerfield, Ill., “in the wake of all the turmoil and fear out there,” says Rob Goggins, Great Clips’ vice president of franchise development.
Mr. Goggins says the franchiser was able to get the financing partly because of franchisees’ low default rate on previous loans. Much of the money is still available, the company says.”
read full article by Richard Gibson
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