Inevitably in the life of a business, there are times when there is a strong need for some unexpected capital. Merchant capital can come from a variety of sources, but they are definitely not all of equal value. Understanding the differences between these sources allows you, the business owner, to make the best choice to meet your needs.
The Hideous – Friends and Family Members
Turning to family and friends for money when your business needs it quickly, may not be the best idea. I would advise seeking alternatives if you do not want to put a strain on those close to you. No business owner would borrow money to start or operate a business under the notion that it will fail, but inevitably, many do.
When borrowing money from friends and family they could feel that they have the right to tell you about your business and how best to run it. Do not mix your personal life with your business life, it only causes additional stress.
The Awful – Banks
There is not one particular thing that is awful about bank loans, there are many. They carry strict underwriting guidelines, do not approve many businesses, require an exorbitant amount of paperwork, and are sluggish due to their size and financial constraints. If perfect credit, financial statements, waiting for an answer, non flexible repayment schedule, and collateral describe your situation, then a bank loan may be a wise choice.
If, on the other hand, you are a fairly new business, have little collateral, and need money quickly for a nonspecific purpose, you can forget about a bank – they won’t give you a loan worth getting.
The Great – Merchant Capital Advance Loans
Before you despair, consider that your merchant account provider is in the perfect position to offer you a reasonable advance with manageable terms. Even new businesses take credit card payments and those payments are tracked by the merchant account holder. If you have a few months of reliable credit card sales, you will be able to sell, at a discount, future sales in exchange for needed cash now.
The great thing is there are no personal guarantees, no complex applications, and you have the freedom to use the money for what you think your business needs.
Article kindly provided by UberArticles.com
Topics: Small Business | Comments Off
Tags: Business Advance, Business Cash Advances, business loans, Credit Card Factoring, credit card processing, entrepreneur, Merchant Account Loan, Merchant Capital, Merchant Cash Advances, merchant loan, merchant processing, Small Business, small business loans, working capital
MLA Style Citation:
Rabah_, Rodney "Sources Of Merchant Capital; The Good, The Bad And The Ugly." Sources Of Merchant Capital; The Good, The Bad And The Ugly. 2 Jul. 2010. uberarticles.com. 7 Oct 2014 <http://uberarticles.com/business/small-business/sources-of-merchant-capital-the-good-the-bad-and-the-ugly/>.
APA Style Citation:
Rabah_, R (2010, July 2). Sources Of Merchant Capital; The Good, The Bad And The Ugly. Retrieved October 7, 2014, from http://uberarticles.com/business/small-business/sources-of-merchant-capital-the-good-the-bad-and-the-ugly/
Chicago Style Citation:
Rabah_, Rodney "Sources Of Merchant Capital; The Good, The Bad And The Ugly" uberarticles.com. http://uberarticles.com/business/small-business/sources-of-merchant-capital-the-good-the-bad-and-the-ugly/
Comments are closed.
Uber Articles and its partner sites cannot be held responsible for either the content nor the originality of any articles. If you believe the article has been stolen from you without your permission, please contact us and we will remove it immediately. If you have a problem with the accuracy or otherwise of the content of an article, please contact the author, not us! Also, please remember that any opinions and ideas presented in any of the articles are those of the author and cannot be taken to represent the opinions of Uber Articles. All articles are provided for informational purposes only. None of them should be relied upon for medical, psychological, financial, legal, or other professional advice. If you need professional advice, see a professional. We cannot be held responsible for any use or misuse you make of the articles, nor can we be held responsible for any claims for earnings, cures, or other results that the article might make.