If you have a small business in a small town, then the merchant advance funding may be a big deal for you. However, if you do not use it in the right way, it can really cost you a lot of money. These have a huge annual percentage inclusive of the fees and amount of loan mostly occurring in three digits. The daily payment schedule can prove to be wrong for your business. Sometimes, these may be the wrong option for your business. It is for this reason that often accountants can consider this as the last option.
How does it work?
This is most effective for the businesses who obtain most of their revenue by debit or credit card sales. Nonetheless, with the advancement in technology, this has also become effective for the businesses that do not work depending on the debit or credit card sales. If you consider this to be a loan, technically it is not. In this the provider gives you a sum of money which you will need to repay in the future.
It usually works in two kinds. First, where you will get upfront of some money which you will have to repay depending on the future sales. As per experts, this is the most common kind of option.
Apart from the monthly payments, you can prefer paying on a weekly basis. You might even choose the option of paying on a daily basis. The amount which you will be paying depends on your capability of repaying.
Why do people choose it?
Among the borrowers, this is one of the most prominent options
Fast – While you will require filling many paperwork for getting a loan, you can receive this kind of funding within a week. The provider keeps a check upon how much your business gathers on a daily basis so that you can repay easily.
In case of low sales, the payment would be low too – The schedule for repaying the price has a fixed percentage. When your business isn’t going too well in the market, the repayment schedule would be adjusted according to your income.
You won’t lose your assets – Since this is the unsecured kind of option, you will not need to put any collateral. This signifies that when your sale goes down or when you fail to repay, you will not need to lose your asset. In such a case, the provider will help you to cope up with extra charges. To get more information