If you have had a small business for any length of time, you know quite well that there are occasions where having access to an extra five or ten thousand dollars could make a huge difference. Regardless of your specific reasons, those extra funds could keep you from losing sleep, could give you the ability to jump your business to the next level or even give you the leverage you need to skate through the holiday sales season with ease. Standard loans can be problematic for many reasons so getting a `merchant loan may well be the leverage you need to get you over the hump.
Standard bank loans usually take months to process, require some form of collateral and take years to pay off. Even though you’ll want this type of loan for initial start-up, major expansion, other capitalization needs and large scale purchases, they’re more hassle than they’re worth for a short term need. Merchant loans on the other hand usually take a couple of days to get approved, are based on incoming cash and can be paid off in weeks or months instead of years.
For short term cash flow or cash infusion needs, these loans work perfectly in a lot of situations. As an example, if you’ve got a customer on Net 30 or Net 60 terms that make a major purchase; it may seriously affect your cash flow. Loans like this can help you keep pace or recover if you’ve got a slow paying client or have one that doesn’t pay.
Another purpose that this type of loan can satisfy is seasonal inventory purchases. Many times small businesses need to increase their inventory dramatically in order to satisfy customer demands during the holiday season. Unless a company has a way to temporarily increase their purchasing power, they may well miss out on what could be a very successful endeavor. Being able to take out a merchant loan not only gives them the ability to have the inventory they need but also allows repayment to take place as a part of credit card receipts. This takes a lot of the hassle factor out of repaying the loan as well.
Merchant loans are short term loans designed to help you get through a temporary situation where an infusion of cash can be a real solution. Whether you have a cash flow issue or need to boost inventory for the holidays or to satisfy an order, being able to count on having access to the funds you need, when you need them is a huge comfort.