Merchant Cash Advance: Choosing the Best Provider

Evaluating all the available options and making a sound decision when your business needs cash could appear difficult. Nevertheless, taking your time to choose the right business advance provider is worth your time. There are many industry players offering cash advance and factored loans. Some being large lending institutions and financial services, others being small businesses but specializing in merchant cash advance provision. Although an institution you have already dealt with like your present bank or credit card processor may give the services you require, if your business is trustworthy, you can negotiate a better rate elsewhere since other companies could be familiar with your trade history. Therefore, what should you look for when choosing the best provider?

One of the recommended methods is to evaluate several providers to determine if you can get the best terms for your business. Other essential qualities to look for in a provider include:

•Knowledge-The provider you decide to choose should be able to explain to you the repayment and application process, and put all your worries a side.

•Accessibility-you will need a provider who is able to communicate with you throughout the application and repayment.

•Reputation- Choose a merchant cash advance provider with a solid and established history in providing financial service to businesses similar to yours.

•Honesty-The best provider for your merchant cash advance should be one who is able to evaluate the financial condition of your business and make recommendations regarding the type of financing you would need. Don’t go for a provider who will steer you in taking an advance amount which is unreasonably too high.

•Broker or principle- You should deal directly with the merchant cash advance provider and not a broker. Therefore, you must ensure that you verify who you are dealing with by demanding a copy of the contract you wish to sign before going on with the application.

•Experience- You can avoid being a victim of unscrupulous merchant cash advance provider by finding out how long the provider has been in merchant cash advance practice.

•References- Checking the references of every merchant cash advance provider can help you establish whether a provider has the best track record and responsible partnership with previous customers.

•Specialty- You should look for a provider who has experience in a business similar to yours in terms of revenue, size, industry, or amount advance.

•Industry association membership- In 2008, the merchant cash advance industry established a trade association binding them towards self regulation. Therefore, if possible, go for the merchant cash advance with membership in one of the most reputable Associations you may know of.

Don’t go for a provider who charges fees for different services beyond the advance fee or factor rate, such as an administration fee or other applicable charges. Take considerable caution! Processing and administrative fees are not usually assessed by most respectable companies. Therefore, no provider should give an ultimatum that you must switch to their company for all of your merchant cash advance services like credit card processing. Finally, you must always remember to compare prices and quotes from different providers so as to ensure that you get the most appropriate deal.

Merchant Cash Advance Benefits

When you think of a cash advance, you probably generally have the idea of a company that agrees to pay an individual a specific amount of money, only to have it returned in a short period of time, often times with a high interest rate attached to it. This is know as a personal cash advance and it is rather useful when an individual needs case quickly and is not eligible for a suitable loan through their financial institution. A merchant cash advance is similar in spectrum, but instead of an individual it is provided to a business or company. When a business it not able to receive a needed loan through their bank, they can’t just go to mom and request additional funds, they need to look elsewhere. The merchant cash advance is the necessary service that they most go through, and due to thighs credit checks placed on these large loans, more and more businesses are looking for such a cash advance.

Typically, merchant cash advance is done where another business, wealthy individual or other banker is willing to give the desired amount of money to the business, in exchange for a set number of shares or a portion of the business. The actual interest or percentage given back to the individual or business providing the merchant cash advance does vary, depending on the deal, but it is important to learn about the merchant cash advance best practices, to make sure you do not loose more money in the process, or end up giving the company back over to the provider.

For starters, only take out what you need. You don’t want to owe so much money back to the provider of the cash advance that you are basically stuck and can’t get out of this debt. You also want to watch the amount of shares you give to the investor, in order to follow the merchant cash advance best practices. You don’t want to give anything close to a majority of the shares. In fact, keep the amount of shares down to a minim, if you can. Instead, you want to give a reduce amount of shares for the service.

Other times, the individual might just want a certain percentage of sales for an extended period of time, or perhaps just the money back, plus a set amount of interest. You don’t want to end up giving large amounts of money back, and although straight cash back might not sound as desirable to you, it is far better than actually giving out shares of the company, because once you hand out these shares, the individual is going to end up owning the portion of the company forever.

If a merchant cash advance is something your business would be interested in , feel free to visit Merchants Capital Access – the most quality provider.  http://www.merchantscap.com/