Owning your own business can bring you a sense of accomplishment and can be very rewarding. Along with working with a craft or industry you love, you are also creating your own foothold within that industry. However, periods of low cash flow can turn your enjoyment into a stressful situation. During these periods, many business owners look for ways to create a cash influx, such as with merchant cash advance services.
Merchant cash advance services provide business owners with needed operating capital without the owner having to provide any collateral, meaning there is a low personal risk for the borrower. They are also typically a faster transaction than a standard loan. In many instances, the process can be completed in a matter of minutes with the borrower receiving the funds within 24 hours. However, one of the primary reasons a business owner considers a merchant cash advance service is the method of repayment. Unlike a standard loan in which you have to pay a lump sum at some point during the month, the repayments on a merchant cash advance are typically based on how much the business makes on a daily basis. This is great for businesses that experience slow seasonal periods.
There are many merchant cash advance services to choose from. However, they are not all created equal. We are going to talk about the top three services currently available so that if you find yourself in need of such services, you will have a good starting point to begin your search.
Out of all of the merchant cash advance services available, PayPal Working Capital is probably the best option. For starters, if you have been using PayPal to receive payments and to process transactions, you are more than likely already qualified. They have repayment costs that can be as low as 6 percent and business owners can borrow anywhere from $1,000 to $85,000, so long as they meet the minimum requirements.
Square Capital is another great option for business owners needing additional operating funds. Just as with PayPal Working Capital, if you want to apply for a merchant cash advance with Square Capital, you have to have an account. One of the best benefits of using Square is that there are no minimum repayment amounts. Additionally, this company offers some very flexible repayment terms which are ideal for seasonal businesses.
One of the key benefits to using American Express Merchant Financing is their repayment rebate. If you can repay the amount borrowed within 90 days, they will give you a 50 percent rebate on the repayment fee. Depending on how much you borrowed and the repayment terms, this could be substantial savings. This company is a good option if you already have an established business with consistent revenue to ensure you don’t fall behind on the payments. If you do, the company may hold back 100 percent of your sales until your account is current.
Having to rely on outside funding to keep your business operational is not a situation any business owner wants to be in. However, life tends to throw us curveballs and when it does, it is good to know that there are alternative financing solutions when we need them.