Business loans. Of the 543,000 new small businesses that open every month in the U.S., you better believe that a lot of them are seeking help from lenders. In 2012, America’s small businesses listed three major reasons for seeking business loans:
- Improving cash flow
- Building reserve funds
- Inventory purchase
Though it can be said for most of these businesses, it is especially true for those with cash flow problems: fast small business loans are the goal. About 15% of small businesses struggle to obtain credit for their businesses, and fast small business loans can be just the boost they need to get on top of cash flow issues.
The truth is that loans are usually anything but fast. The closest things to fast small business loans are merchant cash advances which provide access to fast capital in exchange for claim over accounts receivable for a certain period. Though merchant cash advances can be great solutions for many small business owners, they do have their drawbacks, including higher interest rates. If you’re in the market for these “fast business loans,” there are certain important considerations. Here’s our best advice for those pursuing cash advances.
- See all the fees upfront, and make sure you understand them all.
- Make sure you are clear about the terms. Some involve daily fixed amounts taken from your account while others take a percentage of your daily credit card sales. Don’t get hung up on those percentages. A lender might demand 10% of daily credit card receipts until the amount has been paid, but it might create an interest rate of more than 90%.
- Insist upon seeing a projected annual percentage rate for your loan. This will make it much simpler for you to compare the advance with other options.
- Look around. The merchant cash advance business is quite competitive, so make sure you’re getting the best possible rate.
This might be your best option, but it’s still important that you consider it carefully. Not every opportunity offered to you will get you what you need in the long run. Visit here for more information.