Does Your Business Have A Collateral Crisis? No Worries! MCA Is Here To Help
Does Your Business Have A Collateral Crisis? MCA To The Rescue!
Unforeseen Events
Unexpected events can have a disastrous outcome on startups and small businesses and are enough to make your struggle of establishing business into rubber. The worst is to become short on cash in a business. This can threaten a major product line, business unit, and also damage the organization’s financial performance. Dealing with such crisis is no easy, and it is a stressful time in an individual’s life.
However, the businesses of all sizes need an adequate amount of funds to run a business and perform all the functions smoothly and evenly all the time. Funding is the fuel on which the whole business depends. To solve the money-related problems of the business, there are many options depending on the business’ wish to be owing money and maintain itself through a variety of events.
It’s been witnessed that more and more people choose to borrow from financial institutions. Unfortunately, financial institutions ask owners to something pledged as security for repayment of a loan, to be sacrificed in the event of a default. This makes obtaining a loan difficult for the business owners.
Collateral Crisis?
The collateral crisis in a business is one stress that more than 50% small business are facing in the present day. Collateral is what banks ask to pledge something when they approve a business loan. One report sheds light in the situation that Banks consider 20% of small businesses “non-lendable” due to their lack of collateral, and more than half are considered “marginal” borrowers.
Unfortunately, business owners complain about how hard it is to get a bank loan. The reason behind the difficulty in obtaining a loan is that many small businesses are short on collateral. Due to the collateral crisis, they have to turn to factor, merchant cash advance loans.
Among the list, Merchant cash advance is a great alternative helps to get you fast capital without any collateral requirements. With a merchant cash advance, your company gets capital in exchange for a percentage of your daily credit card sales. It is a quick, easy way to get a business cash advance with no need for collateral—even if you don’t have a great credit score.
Unsecured Option
Since merchant cash advances are unsecured and no tangible asset is pledged against the necessary funding, the funder is assuming the MCA’s risk, which is why the fees of obtaining the advance are higher than normal lines of credit or bank loans. The fee charged can vary drastically from lender to lender and greatly exceed the Annual Percentage Rate (APR) charged for traditional business loans and SBA loans.
In merchant cash advance financing, providers quote the interest rate on a daily or a monthly basis which is then charged to the amount of funding that is outstanding to the business.
After repayment of the advance, merchant cash advance providers can issue new funds at larger amounts if the companies’ sales have improved and also support the extra funds.
Looking for a fast capital for your business? MCA can be one important financing option with no collateral requirement you must consider.
