photo credit: AMagill
Business’ that are having trouble getting bank loans or line’s of credit that they usually qualify for do have other options. Cash advances for merchants is a valuable option that work’s for many big or small business’ all over the world.
When a line of credit (so to speak) is given to a business, the company takes a set percentage out of credit card sales until the premium and interest is paid, which usually is paid in under 12 months time. But this means that there’s no set time and price that is to be paid back like a bank loan. BusinessWeek posted an article regarding how some businesses can benefit from merchant cash advances.
Business will pay lower amounts during their slower months of business. Say you had a $20,000 line of credit given, you will end up paying $27,000 with interest in under 12 months. Most don’t see this as bothersome as a strict and regulated by law bank loan.
Boulton says he’d rather have a bank line of credit, but he’s been repeatedly turned down. “It’s the only way that I’ve found of getting funds that I need,” he says. “The sooner I can get out of it, the better. But right now it’s the only option I have.