Helping you to know more about Merchant Cash Advance
Do I know something about it?
The answer is maybe you know, maybe you don’t. The reason being this practice is just a few years old and has not seen much of the outside world.
What it is about is satisfyingly simple. Merchant cash advance is here to advance your life by giving you opportunities that others have feared to grant you. When a bank refuses to give you loan due to low income or no experience in business, MCA never closes its door. All you need to show them your credit card or debit card of your work and that will do the trick.
How Does It Work?
Instead of conventional loan technique, MCA uses the credit card, evaluates the business and generates grant instantaneously. The repayment also has novel idea; it is repaid by getting a share in the profit of future sales.
Does It Give Me Any Option(s)?
Merchant cash advance is not a static phenomenon. It has different types and aspects. It can be:
- Fixed percentage: as the name suggests, the repayment is fixed in the form of percentage initially for future sales.
- Daily or weekly payments: in this type, the repayment is not fixed or proportioned.
According to the condition in which they are used, they have their individual significance.
How Good It Can Be?
It is new, popular and has good future prospects. Some of them discussed are:
- It is not a conventional loan; it does not have to go through tough legal procedures hence no bank, attorney and court make life simpler and happier.
- Absence of big banking organizations practically means lesser formalities and least legal procedures. You can improve your business in the time you save from all such engagements.
- Small projects are often rejected by banks and other organizations and need a support for their future sales. Advance merchant cash is there to assist in their monetary world.
- Usually loans restrict the client about faculty of grant they provide hence leading to lesser business autonomy. Merchant cash advance is the one of the best options. It does not require any such formality.
- One does not require giving collateral for this system. Hence loss of asset in case of any damage to business is avoided.
How Bad It Can Get?
Things when they become less fruitful can be rendered as bad. Few ‘bad’ points of MCA are discussed as:
- This system has certain impacts due to the conditions and situations of business. For fast growing business back- payment is quick. However, when business is progressing rather slowly the repayment is very sluggish.
- The laws and regulation are not yet formed owing to its little age. It is in the practice since only a few years.
- The rules are ambiguous due to less known status of this system of economy.
- Wealth systems may become secure at certain time, there is always a risk for getting into debt cycle especially when you keep on getting advance payments and you keep ignoring the repayment procedure and requirements.