Banks watch out as the newest business financing product - the premium merchant cash advance - makes its way on to the scene.
As the economy changes, merchant cash advance providers are doing their parts to make business financing a possibility for small business owners.
The premium merchant cash advance is in essence, a refined version of the traditional merchant cash advance, offering more attractive conditions and benefits to qualified applicants.
This new product has become necessary as more and more people, who under normal circumstances would have been approved for a $50,000 loan through a bank with no problem, are now looking elsewhere for business financing due to the tightening of bank lending standards.
According to the October 2008 Senior Loan Officer Survey, over 58 percent of respondents said that over the past three months, lending standards for small businesses tightened somewhat and over 16 percent said lending standards tightened considerably.
Slightly over 64 percent of these respondents named a "less favorable or more uncertain economic outlook" as the reason for the tightened lending standards.
Many small business owners who fall victim to these tightened standards and walk away from banks empty-handed end up contacting merchant cash advance providers to finance their business endeavors.
Now, select companies have devised an advance that is specifically designed to work for this new caliber of borrower.
In order to receive a premium merchant cash advance, a small business owner must have owned his/her business for at least two years and have a Fico score of at least 600.
The business must not be seasonal, and the applicant must qualify to receive at least $50,000.
Small business owners can choose terms of up to 12 months, and they can receive low rates.
Like the original product that many may already be familiar with, the premium merchant cash advance is unsecured (no need for collateral), and the repayments are made automatically as a small percentage from the businesses' credit card sales is deducted daily, until the advance repayment is complete.
With the premium merchant cash advance, small business owners who in the past, used banks as their primary sources of business financing, now have a new home and can continue securing funds for their prosperous businesses.
As the economy changes, merchant cash advance providers are doing their parts to make business financing a possibility for small business owners.
The premium merchant cash advance is in essence, a refined version of the traditional merchant cash advance, offering more attractive conditions and benefits to qualified applicants.
This new product has become necessary as more and more people, who under normal circumstances would have been approved for a $50,000 loan through a bank with no problem, are now looking elsewhere for business financing due to the tightening of bank lending standards.
According to the October 2008 Senior Loan Officer Survey, over 58 percent of respondents said that over the past three months, lending standards for small businesses tightened somewhat and over 16 percent said lending standards tightened considerably.
Slightly over 64 percent of these respondents named a "less favorable or more uncertain economic outlook" as the reason for the tightened lending standards.
Many small business owners who fall victim to these tightened standards and walk away from banks empty-handed end up contacting merchant cash advance providers to finance their business endeavors.
Now, select companies have devised an advance that is specifically designed to work for this new caliber of borrower.
In order to receive a premium merchant cash advance, a small business owner must have owned his/her business for at least two years and have a Fico score of at least 600.
The business must not be seasonal, and the applicant must qualify to receive at least $50,000.
Small business owners can choose terms of up to 12 months, and they can receive low rates.
Like the original product that many may already be familiar with, the premium merchant cash advance is unsecured (no need for collateral), and the repayments are made automatically as a small percentage from the businesses' credit card sales is deducted daily, until the advance repayment is complete.
With the premium merchant cash advance, small business owners who in the past, used banks as their primary sources of business financing, now have a new home and can continue securing funds for their prosperous businesses.
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