When weighing the pros and cons of business financing, many new businesses do not have the sales track record to either secure investor or angel financing. Or, if they do have interested parties, the business entrepreneur is most likely giving away a large portion of his equity.
CNN Money listed using personal credit cards as a source of funding due to the immediacy of the cash infusion. However, the negative risk noted are the high interest rates and risk of hurting your credit history and credit score.
For companies with growth patterns or limited markets, investment capital may not be an option. Utilizing the strength of company's MasterCard and Visa sales may not only be the fastest way to infuse cash, but in the long run the lowest dollar cost for operating capital.
Many businesses only give merchant cash advances a cursory look as a financing option due to the perception of its high cost. However, when measured against a simple ten year loan at a medium risk interest rate, business cash advances are less costly. As an added incentive to business owners, cash advances don't carry the burden of collateral, the threat of late fees and the discipline of a fixed monthly payment schedule that small business loans have.
Factoring, another alternative, is similar to business cash advances however it uses invoices on past sales as collateral for the financing. Business cash advances use the promise of payments from future Visa & MasterCard sales as a pledge, not as collateral, for the advance's repayment.
To see how well and how quickly a merchant cash advance can assist your company, contact the small business financing experts at US Business Finance Corp. There is no time like the present to address the financial business needs of your company.