The online money lending platforms make use of technology with a view to causing a positive disruption of the traditional lending process. Without a doubt, they have indeed become a very vital component of the FinTech economic sector. Owners of small businesses who may be shopping for quick loans can look away from their local banks which may end up saying a big “no!” may need to consider online loans.
It certainly sounds awesome; the secret is for you to get just the right amount of funds you may require to help grow your enterprise. This is to be done at the lowest of prices at which you are qualified and also at the right time.
What is the big deal about Merchant Cash Advance?
The first thing you should have at the back of your mind about Merchant Cash advance capital financing is the fact that it is not actually a loan, it is basically a daily transaction which involves the sale of the future revenue of your enterprise. Instead of going in search of a loan via a bank or any other lending institution, your business will be able to gain access to quick funding by simply parting ways with a part of their deposits in the future and they have it paid back to the cash advance company.
What is the procedure for the cash advance process?
One thing you cannot take away from this type of quick loans is the fact that they are quite easy and require less business and credit documentation. Here is a peek into how it works:
- Credit application
You will have to get an application filled and ensure that every single person in your organization who holds at least 20% in terms of equity fills the form.
- Get your most recent bank statements ready (3 – 12 months)
Merchant cash advance lenders usually make use of your cash flow for the previous 6 months to ascertain what the peak funding they will provide you will be. More often than not, the maximum is about 20% of whatever your annual sales may be
- Get the cash advance offer
The next thing here is that the cash advance company will present an offer which contains the amount to be funded as well as the terms. Upon getting your offer, the company will need you to supply a voided check as well as one photocopy of your ID card.
- Get the funds!
The moment your bank details have been confirmed, the lender will straight away get the funding required wired into your bank account.
Why go for online loans?
- The process is quite easy
The application for a merchant cash advance is usually quite straightforward and fast. As a matter of fact, you should be able to fill out the application off the internet. All you will be required to do will be to make available certain information such as your recent credit card statements, well as your means of business identification. The process should see you getting a response from the lender within 2 days. The ease of this process helps you maintain focus on your business as against wasting long precious time as you would normally do when sourcing for loans off the traditional channels.
- Quick access to capital
In the event that your application is approved, you may be able to access your capital from the provider within a week. This should help you quickly pump the funds into the right places so as to get your business up and doing. Certainly, there are a few things you could use such funds for ranging from giving your business location a facelift or paying off a really pressing debt.
- There is no effect on your credit
Getting a merchant cash advance certainly won’t have any effect whatsoever on your credit. The reason for this is that you are not collecting a loan but you are simply exchanging your future credit card sales for the purpose of generating capital. Due to this reason, you do not need to worry your head about making payments on a monthly basis. In addition to this, a large number of providers do not really need you to have a great credit score, hence you do not need to spend your time trying to improve your credit score before you apply. One thing you should however know is that the newly gotten funds from loans online can help in boosting your credit score if you make use of it to pay your debts.
- There won’t be stress on you
As rewarding as owning a business may be, it also comes with great responsibilities. This may mean a whole lot of stress, and this is even more so when you are not in a good financial position. Such quick loans can go a long way in helping you reduce some of these pressures. This should definitely help boost your zeal and optimism in your enterprise.
SBA Working capital
Despite the fact that SBA loans are known to be a quite slow process of funding, there are certain SBA financing programs which could make SBA loans available to you within 14 days of your application. By making use of the SBA express loan system, a number if SBA lenders are usually able to get borrowers qualified within just a few minutes as well as get an underwriting completed with a few days.
Upon getting that done, the SBA is usually able to get the financing signed off within about 36 hours of getting the request for the loans. The lenders are also able to make use of their own paperwork as against that of the SBA which helps to get the whole funding process expedited.
What are the processes involved in SBA funding?
- Get your documentation across to the SBA lender
There are a couple of documents which the SBA lender will as for such as proof of your tax returns for 3 years, business financials for 3 years, schedule of liabilities, financial statement (personal).
- A term sheet is issued by the SBA lender
The next step involves the lender offering you a term sheet which indicates the term, rates amortization, lender fees as well as equity injection.
- Due diligence
At this stage, the SBA lender will require that you make available business and other documents which are required by both the SBA and the lender with a view to carrying out underwriting and due diligence.
- Get yourself a letter of commitment
Upon underwriting and due diligence, the lender will then have to issue a letter indicating intent. Upon the execution of the LOI, the SBA lender will then get the entire package sent to the SBA for their approval of your quick loans.
- Get the funds
The moment the SBA gets to sign off upon the lenders approval, the lender will then proceed with making the funding available.
In summary, when it comes to getting funding for your business whether in the form of online loans or through any other means, knowing the right place to get such quick loans is imperative especially if you are looking to take your business to the next level.