Non-Bank Loan Providers – Merchant Cash Advance

Previously, the business owners used to rush to the banks for obtaining money assistance as at that time banks were the only source of securing a loan. However, in today’s modern world, we are available with a variety of non-bank lenders who can satisfy the monetary needs of our business. These non-bank loan providers have formed a competitive environment to the borrowers’ advantage.

A non-bank fund provider is the one who is not a credit union, financial institution or a bank but a person who has many funds and he lends it to others to earn some profit.  The number of small business organizations has increased over the years, and not every one of them is financially sound. Numerous small business proprietors don’t have adequate personal funds to run their business smoothly. Therefore, they seek assistance from outside sources.

Conventional loan providers are always unwilling to provide monetary assistance to the owners of small business. Statistics show that around 60 percent of the total companies in the small business industry, fail to acquire loan as their loan applications do not get approved, which is why there is a need for the non-bank loan lenders to step into the corporate arena.

1) Why choose MCA?

Various entities qualify to be a non-bank loan provider, but if your small firm requires immediate finances, then the wise choice will be to apply for an MCA. They are not particularly known for offering financial aid to the needy business owners. They purchase a percentage of your firm’s future credit card income. So, to obtain an MCA loan, your firm needs to accept credit and debit card transactions. This is necessary as the amount to be repaid will be deducted from the daily credit card sales.

An MCA lender is a non-bank loan provider who offers you a loan within a few days. The most amazing thing about MCA is that they give loan approval very quickly. It takes around 1-2 days to procure a cash advance from MCA providers. Another great thing about MCA is that you are not required to submit any collateral when you apply for it.

The criteria for repaying an MCA is also very comfortable as the amount deducted is based on the regular credit card sales. During the months of high sales volume, repayment is going to be more whereas during tough times with low sales volume, the amount deducted will also be less and you will be left with sufficient amount of money for meeting your daily requirements.

This is the major reason why this non-bank loan option is given preference over conventional sources. According to the traditional systems, you are compelled to pay a fixed amount irrespective of the performance of your business. There are numerous providers of merchant cash advance from whom you can get financial assistance to meet your small business requirements.

It is advisable for you to consider some things before you procure a loan from someone. You need to check the rates. Moreover, there are MCA providers who offer cash advance to a small company belonging to any industry. Another great thing about MCA is that it provides funds to small companies with bad credit.

2) Other sources of non-bank loans

  • a) Small business grants: This is another source of the non-bank loan. This is more like a grant that is given to a small business owner by the local or state governments. This is an excellent option as these grants are not required to be repaid.

These grants are given to all kinds of small business owners, but specific grants impose restrictions and have stringent requirements when it comes to usage. On the other hand, an MCA is a better option as there is no restriction imposed on the utilization of loans.

  • b) Angel investors: These are the people who show their interest in investing in startups and small business. These investors have made their investment in various prominent companies like Google and Yahoo.

These angel investors demand 30% of the total ownership as they are ready to fund your business without going through any lengthy procedures. Here, MCA is a better option as the MCA providers don’t demand ownership of your business instead they offer a flexible repayment system, where the repayment is made from the daily credit card sales.

  • c) Venture capitalists: These are the people who invest in the startups and small companies that have many potentials. Moreover, they offer expertise and mentorship. This non-bank loan is excellent for small organizations that have crossed the initial stages of the startup and are ready for growth.

Venture capitalists have a fixed times span in which they recover their funds. They look for more stable options. They may also interfere with the marketing strategy of the company as opposed to MCA providers who don’t interfere with the functioning of the company. Neither is there a fixed repayment schedule to adhere to.  

  • d) Microfinance providers: There is nothing to be disappointed about if you don’t get a loan from the bank. Some non-bank loan providers can help you in meeting your small business funding requirements.

Owners of small companies who cannot get access to traditional bank loans can go for this option. These providers impose a condition of strong fund flow, but MCA lenders don’t impose such conditions as repayment method has nothing to do with the fund flow statement.

So, this was all about non-bank loans and nonbank loan providers. Above-mentioned were various sources from where you can obtain finances from your small business, but they have many drawbacks, but MCA is considered as the best one.

Therefore, Merchant Cash Advance is the best financing option for small business firms, which are looking for financial assistance to meet their daily business requirements. So, if you are a small business proprietor, then the best choice for you is Merchant Cash Advance.

By | 2018-05-30T13:30:54+00:00 May 30th, 2018|Business Loan|