Big loans seem outdated for most businesses

All require loans for some reason or other during their life. Well, you cannot predict as to when you will need money, and how much, but today you have numerous options available for funding.  No longer small businesses go for large sums of money in loans. They have more accessible choices to decide from. Big loans are not the only option for them. They know this and so do the merchants/lenders.

While getting loans from the big banks is a monstrous activity with outsized documentation and higher interest charges, many go for it for their own reasons. They want money just not to save the business struggle, but to churn out the regular flow of funds, tax saving, etc. Also the higher interest rates, stringent payment schedules and risks of defaulting, all aggregate the increasing problems for big loans.

Not everyone needs big loans, but they are hard to refuse. A better option is to indulge in merchant cash advances, in case of extra funds required. Merchant Cash Advance is referred to purchase of future card processed receivables.  This means merchants receive current funding based on card sales in the future. This is an attractive alternative for merchants as the process takes less time with less paperwork compared to traditional loans. They don’t even require collateral and interest rates are also favourable.

The repayment schedule is flexible and apt for the business. Whenever you need funds, just contact your merchant cash advance company and demand their services. A simple and effective way to mitigate the big loans and their complications.

Source:- https://www.linkedin.com/pulse/big-loans-seem-outdated-most-businesses-lends-clouds

High time your small business requires more funds to grow

All dream to expand their business, earn trillions of dollars, be more profitable and have high growth in business. But is it possible without precise investment of resources, both financial & non financial. We tend to get caught up in day to day activities so much that we forget to foresee what lies ahead for our business. Lack of skilled manpower, outdated technology, changing customer behaviour all seem relevant issues, but do we really focus on them. We tend to overlook all this for the want of funds is a major issue. Next, we do not know what the right time to find investments for our small business.

We get confused over how to approach, whom to approach, what should be the amount etc. The below specified points help to identify the high time to look for funds.





Absence of online presence: In this techno world, it’s rare to find a business without any online presence. Whatever be your target segment or marketing strategies, you are restricting your business growth if not available online. About 60 % of people search online for various options available even if they tend to buy from a local corner store. And if you are not there, you have missed the opportunity. Think again!

No need to have a big website with heavy data and graphics, just a small social media presence or listing of business directories will surely help. Create a facebook page for your business, promote it, start some promotional campaigns, have a twitter handle, list yourself on Google brand listings. All this will definitely help you increase your market visibility.

Slowdown in workflows: the complicated workflows and administrative activities at times consume considerable time and business productivity gets affected. We know there are limits to resources, but we need to streamline the processes, introduce automation in our workflows, stop being manual. Upgrade and expand!

Just basic accounting software, CRM software, or upgrading your existing software will boost the productivity, this way you can save and dedicate more time to business.

Obsolete machinery and equipment: it always takes time to reach a break-even point, but an extended time gap definitely points out to outdated machinery. If the regular breakouts result in missing customer deadlines, it makes sense to invest in new equipment. Get funds and boost sales!

Updated equipment is the need of the hour, if you don’t act now, you may increase chances of a slowdown, something you don’t want. With the availability of loans with no credit check, just go and grab a good deal for your equipment.

Physical space constraints: The staff has increased, you need more space for production, storage and display; all these suggest that business is growing. But we all get so accustomed to our place that we deny the change required. The very idea of new premises, new location, and funds haunts us and we tend to overlook it. Consider different options and decide!

Moving or expanding the office space not just involves funds, but the increased rent/mortgage fees, insurance premium, interiors; utility connections all have to be considered. Also, don’t forget to inform your customers and prospects about new location.

Lack of innovation: the innovation curve is moving ahead drastically, you may just think about an idea and there you have competitors offering that product. Until you have something new and different to offer why would customers come to you. Innovate and win!

Innovation not always requires large scale R&D, or high tech products; it could be anything that helps and satisfies the consumer demands and needs. If innovation is crucial for your business, just seek out funds with no peripherals and materialise your ideas.

Beside these there could be various reasons propelling you to make investments and grow your business. Don’t ignore or put off these signals, move ahead and get financial solutions be it merchant cash advance or preferably loans with no credit checks.

Payday loans: All you want to know

Payday loans are termed as short term loans used to get away a tough situation. Needless to say, they may turn out to be more dangerous for your business at times.  So before diving in the morass, think twice about the costs and risks of the loans with no credit check. 

As the name suggests, payday loans are meant for smaller duration, typically about two weeks or so. They are helpful in case of immediate cash crunch. The payday lenders ask for post-dated check with some fee, against the loan. The check is paid when the borrower has funds. In case of shortage of funds on the due date, the loan is rolled over or extended with additional fee. 

Getting a payday loan is easy, as borrowers don’t require good credit scores, preferably credit history is not considered by the payday lenders.  This is the reason payday loans are loans with no credit check; and are popular among small businesses. Due to higher annual percentage rates, payday loans are exceptionally expensive. 

The main drawback is the high costs involved, in the form of fee component. They are of great help in short term wherein might help is evading the rough condition. Suppose you want to buy some component for the manufacturing, so that you can continue the normal business. But for a long term source of funds, they can be quite risky and will drown you I loans of payday lenders. Not just the higher interest rates, but also the regular bounced checks will degrade your credit scores. The banks, vendors and payday lenders all will worsen the situation for you. 

Moreover, looking at the potential of the payday loan market, banks have also plunged into the system. Though they are no better than the traditional payday lenders, they result in steep risks. The banks have the liberty to access the checking accounts and collect the funds. You may ponder over the ways to utilise the money and it’s gone in the hands of the banks. But if you could negotiate on the fee structure and other terms, it would be beneficial in the long run. 

The borrowers can consider some other ways to get the loans without credit check be it emergency cash fund, build a strong market base, credit card, unsecured loans, part time jobs, overdraft facility, peer lending services etc.

If loans are not paid on due dates these payday lenders can send legal notice and damage your credibility. The payday lenders have the opinion that their loans with no credit check are economical as compared to bounced check fees and overdraft fees. They believe payday loans are an easy and fast way to get money for small businesses. 

Source:- http://www.lendclouds.com/blogs/payday-loans-all-you-want-to-know

Merchant Cash Advance: Is it the right move?

An ideal business situation with enough cash to buy the goods, market them and sell with a favourable profit margin exists only in stories. On the contrary, the typical economy always has a cash crunch for some sections of the businesses. Inventory, natural disasters, business expansion all requires funds. However, where to get the cash from? The credit history is corrupted, no collateral to attach; how to get a small business loan? A Merchant Cash Advance is the only way out.

Merchant Cash Advances come with quick access to cash but you have to pay for convenience. Unlike the regular loans Merchant Cash Advance are reimbursed on daily basis, based on the sales percentage. The higher sales help repay the advance faster. They are quick to get, doesn’t require collateral and adjust to business conditions. If the sales are low, so are your repayments. They give flexibility to manage the business slowdown.

However, the compounded annual rate of the Merchant Cash Advance might run in extraordinary high numbers. The increased sales level increases the return rates as you plan to repay early. This early repayments have no benefits for the business owners as in case of other borrowing methods, where the early repayments result in interest savings. Strong sales are required for a steady flow of funds. The industry does not fall under the purview of federal regulations, as Merchant Cash Advances are transactions and not loans. The vicious cycle of a Merchant Cash Advance can affect the cash flow until you look out for other financing options.

The business of online lenders has flourished to counter the Merchant Cash Advances. They offer lower annual rate and better repayment terms. They might offer schemes for repeat clients with reduced fees for subsequent loans. They can also forgo the least credit score criteria sometimes.

Based on your criteria, the situation and options available choose wisely the best funding possibilities for your business.

Source:- http://www.lendclouds.com/blogs/merchant-cash-advance-is-it-the-right-move

Small businesses are facing collateral crisis

Business owners have faced the dilemma of getting a bank loan over the years. The governments are trying their bit, but are unable to improve the lending market. All want the economy to be back on track, but what is the underlying reasons hindering this much-anticipated thought.

Research studies point out that small businesses lack the collateral security, and bank will not give damn loan without collateral. The basic dynamics of lending markets. About 60% of small business loan applications are rejected for lack of collateral and again another 20% are termed as marginal borrowers.

Small businesses face collateral crunch, and need nor even think of approaching a bank for a loan. The only way out is to turn to private money lenders, factoring agencies, merchant cash advance loans, unsecured loans. However, all this has come with a hefty price tag.

Apart from being able to secure a small business loan, the premium rates are skyrocketing. Quite higher than the normal credit card rates. All this backfires the business owners and they have to sell products at discounted rates to be able to pay back the loan amounts.

In cases where the business owners are able to pledge some collateral, they are mostly their owned house properties. The experts caution them as this involves risk & dilutes the thin line between business and personal belongings.

If the businesses have some equipment, merchandise, physical or intellectual properties, they can be used as collateral. Again, how many of the small businesses aspiring for loans have these collateral? What should they focus on: building businesses or building assets? Doing business is important, but the credit worthiness also matters.

The stakeholders need to review the dynamics of the lending market as the situations may worsen with times to come.

Source:-http://www.lendclouds.com/blogs/small-businesses-are-facing-collateral-crisis 

Thinking of a Bank Loan? The Main Obstacles

The financial crisis has led banks struggle to maintain their breakeven, leave alone the profit margins. This led to hesitation in the case of lending to small businesses or merchant cash advances. Banks find small businesses less credit worthy due to recession. Banks have become risk averse because of increased regulations and legislations. The small community based banks have consolidated into strong big banks.

All these are the major obstacles a small business faces while approaching banks for cash advances or loans. The Federal Reserve data points the general income of the typical household has decreased of the last few years and so has the collaterals owned by the small businesses. The net effect is lower credit scores for the loan seekers.

The loans distributed to the small businesses are risky because of its dependency on the overall economic environment. The increased regulations have worsened the conditions for small business loans. Though the governments carry out their policies flavoring the small businesses, but on ground nothing seems to change.

The banks are becoming cautious and raising the capital reserves, increasing deposits and holdings. They are doing everything to protect their liquidity ratios, and decreasing loan segments for small businesses. Even if banks underwrite loans or cash advances, the transaction costs levied are too high without any guarantee to loan processing. The banks have stopped loans for the smaller amounts; a common feature of small business loans. This leads to a gap in the demand and supply of the small business loan market.

Until recent community, banks played a key role in lending to small businesses, but the number of banks has reduced considerably owning to mergers and amalgamations. The options available to small loans have decreased drastically.

The product of these situations is the frustrated small business owner, who wanders from place to place to approve his loan application. The technology acts as a facilitator both for lenders and for borrowers with respect to risk and transaction costs. The experts recommend small businesses to develop a strong, mutually beneficial relation with lenders; wherein they can seek loans and build credibility in long run.

Source:- http://www.lendclouds.com/blogs/thinking-of-a-bank-loan-the-main-obstacles

Merchant Cash Advance vs Business Loan

When things are going great, businesses have the cash flow they need for success and growth. During lean times or tight transitions, though, your company may need to find a cash advance loan to keep the doors open or to successfully expand. Though a myriad of funding options exists, merchant cash advances and platform lending like that offered here are two of the most popular and advantageous options.

The trick is understanding the difference between the two. Each has its own unique characteristics, and is more or less appropriate for a specific business need.

Let’s start with definitions.

What is a Merchant Cash Advance?

A merchant cash advance gives business up-front cash, and takes payments from the credit card receipts on a regular (often daily) basis according to an agreed-upon amount. If you’ve been in business for more than a year, you’ve almost certainly received at least one phone call offering you merchant advance funding.

What is a Business Loan?

A business loan also provides up-front cash, but is paid back in monthly installments. These are usually withdrawn directly from your operations account, but terms are flexible if another method works better for your business.

For example, let’s say your company needed $1,000 for an advertising blitz in the month prior to your peak season. With that advertising in place, you would be positioned to lead the pack in your region for your industry. Without it, your competition would get the lion’s share of the business and the lost business would amount to far more than the $1,000 you would invest. But it’s been a year since the last peak season, and you don’t have the cash on hand. You need the cash, and like any smart business person you look at the two cash advance options for your business in detail.

Merchant Cash Advance vs Business Loan

Lending Structure

Though it comes from the newer platform lending model, a business loan is still legally a loan. This means it’s scrutinized by federal authorities and subject to limitations and enforcement. Merchant cash advances aren’t technically a loan because of how the payments are structured. This means they aren’t as regulated or carefully watched. This doesn’t automatically mean that merchant advance funding comes with abusive interest rates and contracts, but it does mean you should read and understand that contract as completely as possible.

Approval Process

Merchant cash advance loans approve any business that shows a history of credit card receipts sufficient to pay the money back. This makes them attractive to companies with new or bruised credit histories. Business loans look at data from a variety of sources, including social sharing indicators, your cash flow reports, and traditional credit reporting and industry metrics. 

Speed of Funding

In this category, both means of lending are about equivalent. We deliver funds within 24 hours of approval. Most merchant cash advances work at the same speed – but not always. Ask about this if you go with merchant advance funding and need the money quickly.

Payment Process

Merchant cash advances take a percentage of credit card sales until the loan is paid. If your company needs flexibility that matches performance, a merchant advance might be the better option. If you want reliable, predictable costs for the borrowed money, Our loans serve those goals more effectively.

Other Costs

Merchant cash advances often include set-up fees, processing fees and even payment fees that can as much as double the actual cost of the loan. Our loans include no extra fees. They cost as much as the “price tag” says.

 If you have experience with merchant cash advances versus business loans, tell us a bit about it in the comments below. 

Source:- https://www.kabbage.com/blog/merchant-cash-advances/