As a small business owner, I know the significance of having sufficient funding. In the past, it was fairly straightforward to receive a sba business loan. These traditional loans required a sound business plan, weeks designated to the approval process, and patience. There is no guarantee that you will be awarded this loan, and it will take weeks for your business to receive the funds. This can be extremely unsatisfactory for you as a business owner because you apply for this loan hoping to receive finances quickly for your ailing business. Over the past year, I have looked into multiple ways to fund my business. I knew that the recession was going to impede my sales, so I needed to find a way to secure the funds so I could keep my business afloat. After failing to secure a traditional loan from a local bank, I looked into another form of funding.

One of the new chances I learned of was a merchant advance. I did not have any experience with this method of funding so I did some inquiry. This was not a source for start ups, which my business was not, so this was a non issue. I needed to have roughly three thousand to five thousand dollars in monthly credit card sales to qualify. Luckily, a majority of my customers used credit cards and I easily met this requirement. In my opinion, the greatest part of the merchant advance was the lack of restriction on the use of funds. I was not required to use these funds in any particular way. I did not have to determine to the lender what I was going to use these funds for.

Another advantage to this method was the repayment program. In essence, there was none. The lender would set up a deal with my credit card vendor to automatically take off a percentage of my credit card batch. This would go towards paying back my loan amount. This was handy because it would free me from keeping track of the repayment and extinguished the need for interest charges or penalties on late payments. I recommend this to any small business owner looking for some additional funds.

This entry was posted on Tuesday, October 20th, 2009 at 3:15 pm and is filed under finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.