You know well that all businesses with recent UCC filings need a lot of capital to launch their venture. Or when a business is expanding, it needs a quick supply of cash to keep up with the pace. Traditional loans, or bank loans, come with a lot of terms and conditions and can be pretty difficult to get. In such a scenario, a revenue based loan could be of much help. And, if utilized wisely, it could help businesses achieve their desired growth. Since cash is an important aspect of running a business, without it, a business might end up in a growth stalemate.
So, in case you’re selling your merchant cash advance loan to businesses from the latest UCC filing, make sure you educate them well on how a revenue based loan can be of great help.
A solution to business expansion
If your client’s business is already an established one, you know they may want to scale it up at some point. And this can only be done with a dependable source of funds. But, most businesses do not fall in the criteria set by traditional banks for funding. However, alternative modes of funding, such as merchant cash advances, offer a solution with one of the only criteria being the monthly revenue flow of a business. This type of loan is considered to be a shortcut to cash and it only takes a few days to process. Moreover, there are very limited formalities when it comes to paperwork. The loan is really helpful if a business has cash flow issues, as just bank statements are enough to get a loan from a revenue based lender.
While you’re running your business, you’re generally left with no time to chase loan officers. And as you need cash on an urgent basis, you don’t want to go through all the hassle involved. If you have your appropriate supporting documents ready, you could get your loan in a matter of days. For some businesses it’s actually a life saver and they would choose this alternative funding over a bank loan any time.
No lingering debt
For businesses who want to invest the funding in marketing campaigns, it doesn’t make sense to pay off a 2016 marketing campaign for the next 8 to 10 years. In a traditional bank loan, you’re expected to pay for several years for the money you’re using now. Also, this long-term loan will kill all your chances of being funded again until you’ve cleared your loan. However, with a revenue based loan, you can pay it off in about 6-12 months, which seems like a short-term expense to grow your business and boost your profits. A revenue based loan also doesn’t have up-front costs involved, such as referral fees, packaging, guarantee fees, and closing costs, which is the case with loans from banks. A traditional bank also considers your UCC filing as a part of a background check and will insist on having your house as collateral. While a merchant cash advance doesn’t need all these formalities*.
The above three factors prove how a merchant cash advance can be advantageous for your business. All businesses have to be cautious about is ensuring that their merchant cash flow is high enough to be able to pay off their loan. Once that is sorted, the loan will turn out to be the best solution for cash flow issues.