12 Steps to Finding the Perfect merchant cash advance

If you are running a business and are finding it difficult qualifying for and obtaining a loan from your bank, merchant cash advances might present one of your most viable alternatives. Cash advances can be particularly convenient when you are experiencing a cash crunch but are confident that the business' has sufficient cash flows to service the debt. The requirements for getting the advance are not as stringent as applying for a loan. One only needs to be over 18 years of age, have a dependable source of credit card sales income and have a checking account. Processing, approval and disbursement also takes place quickly making it ideal for those times when you need money at short notice. ™

There are several benefits of getting cash advances from merchants.

• Rapid turnaround time - Even though when the amount a business pays merchant cash advances is more than the principal and interest they would pay on a conventional bank loan, the short time within which the loan is approved makes this a particularly handy credit facility when cash is required urgently. Many businesses consider the high cost of the advance to be a less significant problem than the urgency of accessing cash for the business.

• Merchants place little importance on your credit history - For conventional loans, you must demonstrate a clean credit history. If you have a low credit score, the chances of approval for a loan are slim making borrowing difficult. With cash advances, you need only demonstrate that your business has been receiving credit card sales over the past 60 days. Evidence of cash flow is much more important than credit history when it comes to merchant cash advances.

• Little or no security required - Merchant advances only need receivables for your credit cards as security. Contrast this with the rigorous requirements when applying for a conventional business loan - you will not only have to submit proof of ability to pay but also provide security such as business equipment and property.

• Less risk to your assets - In case you are unable to pay back the cash advance, the merchant has to absorb the loss. This is unlike a conventional loan where the lender can possess all items you provided as security and proceed to take you to court to compel you to pay up the outstanding amount.

• No faxing - There are a number of companies that can provide merchant cash advances without the need of the applicant to fax documents proving their identity. The company will simply use the information you provided on the application form to verify your details and disburse the cash advance if you do qualify.

• Online service - You no longer need to visit the premises of a factoring company in order to apply for and receive the advance. With many factoring companies now providing online service, you can perform the process end to end in the comfort of your home.

Despite receiving millions of dollars in bailout funding from the federal government, America's largest banks are still not lending. In a November report for the Boston Globe, HIS Global Insight analyst Brian Bethune said banks with frozen assets clogging their books do not merchant cash advance have the funds available for lending. "They're not really anxious to do that sort of business," Bethune said.

Nowhere has the frustration over this lending freeze been felt more than in the Small Business sector, as entrepreneurs remain in limbo and business owners fight to stay alive. Many small business owners, disillusioned by the bailout plan that propped up banks so that they would lend, have begun to seek out new means of credit.

One of these means is a merchant cash advance, a type of cash advance that hedges against your business' credit card receivables and deducts from your intake to repay debt. As long as you can provide credit card statements that prove solvency and have been a business more than 6 months, you qualify. While banks became insolvent through bad loans, Merchant Cash Advance companies have created a new way to borrow that doesn't involve risky loans.

The business model has become so popular that businesses have created entirely new ways to connect to providers. Last month, AdvanceMe Inc. launched an iPhone application to help connect borrowers to Merchant Cash Advance companies who want to compete for their business. Not only can you find a company to help you with your advance, you can find out how much you might be entitled to.

Another leading MCA provider is Merchant Cash Finder. They have launched a blog offering businesses new ways to access a services. Their site offers tips like how to tell the difference between a Merchant Cash Advance and a Business Cash Advance and how MCA providers can help restaurant owners. They have also launched a YouTube video channel where an MCA expert answers frequently asked questions to help potential borrowers wary of getting scammed.

Banks tightening restrictions when they have necessary funds to spare is not the only reason for this shift to Merchant Cash Advances. After the credit crisis claimed so much American capital, many business owners and borrowers are wary of taking out a traditional business loan where they would be forced to make payments and keep track of the finances each month. One of the benefits of a merchant cash advance is the ease of repayment. Funds are automatically deducted from your daily credit card receivables until your debt is repaid. There are no complicated bills to sort through or late fees to contend with. And with Merchant Cash Advance companies fighting for the business, many business owners see it as a welcome change from stingy banks shutting the door.

These technological advances have only made access to these new financial programs easier. As communication methods make these simple transactions even easier to obtain, there is no end in sight for Merchant Cash Advance companies.