Merchant Loans Offer Infinite Possibilites for Merchants
March 16, 2010scfm 10 Comments »If you are a merchant who has been searching for ways to finance your business, you have most likely come across the multitude of business loans, and other financing options that are available for business owners.
Startup loans are intended to fund the development of a business from the ground up and business acquisition loans provide funds for the purchase of an already existing business, especially helpful for those who find that the amount of money they can acquire through a startup loan does not cover the actual startup costs.
Other financing options include business lines of credit, which are like credit cards for businesses, offering a specific credit limit up to which a business may access, equipment financing, which is a loan that is given to finance the purchase of equipment, using the equipment as collateral for the loan, and professional loans, which are designed for business professionals such as doctors, dentists, and lawyers.
But a merchant’s needs are different. Merchants need to satisfy customers in order to promote sales, and none of these loans are ideal for the countless merchants who are in need of business financing. And whether products or services are sold, having continuous access to working capital is important.
Fortunately, there is a type of loan specifically designed for owners of retail and consumer-driven businesses. A merchant cash advance is a type of merchant loan that is based on the monthly credit card sales that a merchant processes.
Recipients of merchant cash advances have used their funds to purchase inventory and/or equipment, to increase advertising for their businesses, and even to expand their businesses. Still, the types of existing merchant businesses are endless, and every merchant has financial needs unique to his/her business. For this reason, most lenders impose no restrictions on what a merchant cash advance can be used for.
Another factor that makes merchant cash advances the desired merchant loan is the unique payback procedure, intended to meet the needs of merchants. Instead of requiring a fixed monthly payment, businesses’ credit card sales are used to handle the repayment. When customers make purchases using credit cards, a percentage of those sales goes towards the repayment of the merchant cash advance. This is done until the merchant cash advance has been completely repaid.
The majority of a merchant’s time must be spent tending to customers’ needs and promoting customer satisfaction. This can make it difficult to remember to make monthly payments, ultimately leading to fines and penalties that could have been avoided. The merchant cash advance repayment system eliminates the possibility of these unnecessary charges, taking the responsibility of remembering to make a payment completely off the merchant’s shoulders.
Also beneficial to merchants, many merchant lenders that offer merchant cash advances also provide merchants with the opportunity to renew merchant cash advances. Usually, this process is even easier than the initial process requiring only a signature before the merchant’s account is funded.
Question about merchant loans
merchant loans is scam or what?merchantloans.com seem too goood to be true to me is it?
Tags: card, Credit, merchant, merchant loans, Small Business Loans
Posted on March 16th, 2010 at 6:39 am
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Posted on March 16th, 2010 at 7:51 am
The funds are deducted before they take the deposit into your account. That way they are sure they get their money and don't have to worry about the funds being available when they go to ACH it out of your account.
Posted on March 16th, 2010 at 8:08 am
This is a very legitimate way to get funding for your business. I would recommend looking into another merchant service provider than the one you have. The reason for this is that most merchant account companies will lower your current rates to get the new business. Most Merchant account funding providers are very similar. So I wouldnt worry to much about that side of things.
Since you will be loosing a portion of your daily deposits to payback the funds, I would look at offsetting that cost by getting my merchant account fees lowered.
This company will help you get lower rates and a great merchant funding program.
http://www.omnitranz.com/businesscapital
Hope that Helps! Good Luck !
Posted on March 17th, 2010 at 12:57 pm
0.1125 troy ounce and of .986 pure gold, about 2 dollars in 1900,about 70 dollars today.
Posted on March 17th, 2010 at 2:46 pm
Pros and Cons…
Pros:
Its regarded (today) as off-balance sheet financing
Its open to those with below average credit scores (cash flow vs. history review)
Its fairly quick and easy to process.
Zero liability – no recourse if the business goes under (typically)
Cons:
These types of 'factoring' equate to HUGE percentage rates – and although they will forcefully tell you its not comparable to a loan with an APR% – the bottom line is they average between 60% – 125% APR in hindsight.
Quicksand – often those involved in these types of advances – keep rolling over the advances (they take a certain percentage of your merchant processing receipts – and often require you to use their processing service so they make money there too, and when you pay down the advance – you are so behind, you end up doing it all over again).
This type of factoring utilizes "unearned income" from an unknown source – which is usually categorized as part of an 'equity' account on the balance sheet… If the oversights of the industry ever reorganize this type of lending to be 'on-balance sheet' financing – it could impact businesses and owners substantially (from a reporting & historical / credit rating standpoint).
In the end for a 5,000 advance, you will likely pay back 1500 per month (held back from your merchant account funding) for 6 or more months. Its expensive money, but if you have nowhere else to turn – its your (last/best) option.
Posted on March 18th, 2010 at 5:57 am
Create or join a local meet-ups network group for small business and entrepreneurs. Become a small business expert. Start your own blog offering advise and tips to business owners looking to expand. Attend chamber of commerce meetings. Make yourself visible in your community. Be interested in more than the loan. Be interested in the people and their businesses. Be credible, and sincere, you will get referrals that way. It is all about the relationships you develop and cultivate.
Posted on March 18th, 2010 at 11:24 pm
ans: $717.35
——————-
explanation:
—————-
monthly interest rate i = 1% = 0.01
let us agree to call (1+i) = 1.01 as r to match with GP nomenclature
and assume payments at end of month
also, let L = loan amount
and n be the amortisation period in months.
L will become L*r^n at the end of n months
so payment stream must also be equivalent
let p be the monthly oayments, so value after n months
= pr^(n-1) + pr^(n-2) + ….+ pr + p
sum of this series is p(r^n – 1) / (r-1)
so p(r^n -1) / (r-1) = L*r^n
or p = L*r^n*(r-1) / (r^n -1)
substituting the numerical values in the formula derived,
p = (50000*1.01^120)*.01 / (1.01^120 -1)
= $717.35
Posted on March 19th, 2010 at 4:25 am
The international economic financial system is collapsing because it has a logic problem in its design. As this fact was not accepted by the elite,people is paying now the consequences.
A few of the medium class will buy a piece of land and buy a manufactured house using credits giving by the manufactured houses companies, and most of the people will be reenters forever.
People who works in the loan and construction business will loss their jobs.
The economy status of USA is in a big trouble and banks and houses are only the top of a big iceberg that affects the entire world.
Posted on March 19th, 2010 at 7:42 am
Super Planet, I think you'll have a hard time, bad credit hurt many people in so many ways. http://www.americaschoicetoday.com/Payday-Loan.html
Posted on March 19th, 2010 at 10:33 am
The most common type of lender is the commercial bank, credit union, savings and loan companies, or investment companies. These lenders offer business loans, however, often times these loans must be secured. This could mean offering up your personal assets as collateral<!–Although, the business is yours to do with what you want, these loans are very risky to any un-established business. And that’s assuming you qualify. Unsecured loans, usually less than $100,000, are available to business owners based upon his or her personal credit history.
http://best-loans.awardspace.com/businessloans.htm
Commercial banks may also request that a business have a co-signer or guarantor. This may mean finding a financial partner or checking into the various types of small business loans available through the federal government. Women and minorities have an even wider selection of entities–>willing to loan them business capital. Organizations such as the Women’s Business Ownership, Women Entrepreneurship in the 21st Century, and several others cater to lending money to women that wish to start-up a business, still others actually guarantee them business loans.