Merchant cash advance loans offer a method of funding to business. Unlike other types of loans, these business loans are quick and easy to apply. In case the business needs money on short notice, then this is the best way to finance the business. The best thing about these loans is the short period that it takes to get the money. If you need money to get money on short notice, then this is a good option to consider merchant cash advance loans.
How much can you get from a merchant loan?
When determining the amount of money that you can get for the loan, various factors are put into consideration. For instance, most of the merchant companies will look at the number of sales that you make per month and calculate the average amount of money that they can lend you.
Learning how a merchant cash advance works in canada is the first step before you take a loan. Unlike banks and other financial institution, merchant lenders will not check your credit score, and this makes the process easy. If your business is making substantial sales every month, then you will get a good amount of money for the loan.
How is the loan repaid?
Merchant loans are short time loans, and this means that the repayment period is anything between 3 months and 15 months. The loan is supposed to be paid in the shortest time possible to avoid the high interest rates that can be accrued. The money for loan repayment is deducted from the sales that the business makes. On months when the business makes a lot of sales, then the repayment cost is high and vice versa.
What are the advantages and disadvantages?
Fast loan access
A merchant loan allows you get money in the fastest time possible. You don’t have to keep waiting for a long time before you get money to grow your business. It is possible to get money in your account within days as opposed to banks that take months before you get the loan.
No credit score
Credit scores are a big hindrance to business loans, and they limit the amount of money that you can get. However, with merchant loans, you don’t have to worry about credit scores. You can get any amount of money based on your monthly sales.
However, merchant loans can be a bit expensive because they attract a high interest rate. You need to pay the loan as soon as possible to avoid the high interest rate.