Business financing is not an easy stage, especially for small companies. When you’re starting a business, what options do you have to get capital going? You’ve got the conventional bank loans; then there are the modern options of bootstrapping, crowdfunding and finding venture capitalists who paved the way for the computer industry.
But have you heard of merchant cash advance? Blursoft and Fintegra are just two of the companies that offer financing to small businesses.
What is merchant cash advance? And is it a smart idea for your commercial venture?
What is a Merchant Cash Lender?
Merchant cash lenders like Blursoft and Fintegra provide financing to businesses that accept credit cards and debit cards as payments. The lenders offer a cash advance — not a loan — based on future revenues or sales.
You pay the cash advance with a percentage of your credit card and debit card sales or, for some lenders, receivables streams. The payments may also come with a fee and are done in multiple options.
A merchant cash advance is designed for small businesses; businesses that may have a hard time meeting the complex requirements of a bank loan program. In contrast to a loan from big banks, a business cash advance from Blursoft Capital is unsecured funding.
A typical business that works with a merchant cash advance lender:
- Those with bad credit
- Young entrepreneurs
Any business or entrepreneur who may not qualify for a conventional loan from financial institutions will be able to rely on a merchant cash advance.
How do you apply for one?
How Do You Borrow Merchant Cash Advance from Blursoft?
Blursoft Working Capital Solutions has reportedly funded about 50,000 projects. It offers five options for business cash advance:
- Merchant Cash Advance
- Cash Advance for Contractors
- Cash Advance for Uber Driver
- Cash Advance for Startup
- Cash Advance for Invoice Factoring
If your business happens to have accumulated bad credit or poor credit rating, the Blursoft’s merchant cash advance for startups may be the program for you.
Before you put in an application for merchant cash advance on Blursoft.com, be aware of the qualifications. It’s easier to apply for a cash advance versus a bank loan, but business must still meet the criteria.
For Blursoft, it’s businesses or entrepreneurs that have been:
- Operating for at least four months;
- Generating $10,000, at least, per month in sales, and
- Maintaining a credit score of 500 or above.
Once you meet all requirements, fill out the online form. A funding specialist will be in touch after reviewing your application. If approved, you receive the funds in your account in 24 hours. Your application must be connected to your bank account to facilitate this speedy cash transaction. If you need assistance with filling out the form, call for support.
You could get a loan of $5,000 through $50,000 for about two years. Blursoft’s rate is 1.2. The merchant cash advance provider also has a loan program that allows business with bad credit rating to borrow up to $500,000. This type of loan will depend on the number of years your business has been operating, the financing structure and your credit rating.
How Do You Borrow Merchant Cash Advance from Fintegra?
Fintegra offers small businesses with a steady cash flow and a checking account cash advance from a low of $10,000 to a high of $250,000. Its merchant cash advance process is similar to Blursoft in that you only need to fill out an online application.
Once it’s reviewed and approved, you may be able to receive your loan on the same day of your application. Fintegra has simplified the process with a one-page application form and minimal documents: a copy of your recent business checking account statement. And unlike Blursoft, the business cash advance lender serves companies that have been in operation for at least six months.
What’s the Difference Between a Loan and Merchant Cash Advance?
Traditional financing institutions, like banks, tend to have a complex, lengthy loan process. Because these loans are categorized as secured loans, businesses applying for one must provide collateral and several documents. Proof must be established of your capability to repay the money that is being borrowed.
In contrast to a bank loan, a business cash advance provider may qualify a company that has been around for under a year. Whereas banks tend to favor businesses that have been operating for at least five years. What happens when your startup, shop or home-based business hasn’t been around for that long? Your application is likely to get rejected.
The process and requirements aren’t the only factors that differentiate a conventional loan from a merchant cash advance from Blursoft, Fintegra or other lenders. The average business loan rate also sets these funding options apart. Whereas a typical business cash advance lender may offer 1.2 to 1.4 rate, a bank may offer 2.54 to 7.02.
Are Merchant Cash Advances a Good Idea?
Considering the easy application process and minimal documents required, is a merchant cash advance a good idea?
The financing option works for businesses that meet the lender’s, from Blursoft to Fintegra, criteria. Certainly, when you must get rapid cash to operate, a same-day approval and no collateral will allow you to get immediate funding. The lower credit rating is also appealing if your credit history seems risky for conventional loan applications.
It all seems like a sensible way to get some capital or finance your business. But like every other loan that fast tracks a transaction, some considerations must be determined.
Consider first the percentage of credit card and debit sales the lender is going to get. And this happens automatically since the business cash advance company has access to your checking account. It may not seem like an issue on your application day, but it may be when you miss sales targets. If that were to happen, you could have a problem with your cashflow.
Then there are other financial problems to prepare for if you happen to mix your personal finances with business expenses.
Merchant cash advance lenders, from Blursoft to Fintegra, are not like payday loan providers; it’s not a $500 cash advance no credit check application. But like every type of loan, business cash advance must be considered well before pulling that trigger.