Merchant Cash Advance Verses Small Business Association Loans
Small Business owners now have the choice to select any of the two openings to obtain loans for their businesses. Small Business Association (SBA) Loans, the Merchant Cash Advance (MCA). The present economical recession has forced the banks to lay strict conditions for sanctioning of loans. These restrictions will have a negative effect on the businesses requiring capital to run their affairs, especially when the cash is urgently needed for expansion, repairs, acquiring of necessary new appliances/ equipments or for payrolls.
SBA loans have become difficult to get sanctioned because of the following prerequisites:-
If the business is well established SBA lenders will ask for:-
Collateral available that can be mortgaged with the bank.
Record of your existing liabilities.
Any Balances of previous loans.
In case of a new business to be started SBA lenders will ask for:-
Detailed Business plan.
Prediction of cash flows on monthly basis, covering a period of minimum of two years.
Credit/Debit Cards will be analyzed.
Personal loans you have on your account.
Your liquid assets and your Property holdings.
Proof of your tax returns and your tax documents
SBA is only a loan facilitator.
Banks have to be convinced that loan will be returned in full.
Repayment plan once approved cannot be changed or renegotiated, in case of default/ breach of plan you will be FINED heavily.
In case of breach of terms your collateral/ assets will be auctioned by the bank to recover the outstanding loans.
What prerequisites are to be met in case of applying for loans from Merchant Cash Advance? The MCA just wants the following TWO documents irrespective whether the business is an established or a new one:-
The period of business in months.
Credit/Debit Cards processing and Receipts per month.
Repayment plan is based on Credit Card receivables per month, an agreed percentage of your income is deducted for payment of installment of the loan. Lower the income of the month lower is the installment, higher the income of the month higher the installment of loan. Merchant Cash Advance is friendly, flexible, less risky and a superior choice of financing the business.
Remember your business based on a loan through SBA is on a risk of collapsing in case of non-payment of installments or you becoming a defaulter, where as in case of Merchant Cash Advance the income does suffer a little, but the risk of business collapsing is negligible.
MCA has a much higher rate of approval as compared to SBA based bank loans
Now it for you to decide as to which option to go for, the SBA based loan or an advance from Merchant Cash Advance Loan.
Fanniecarnes - About Author:
I am a business professional with an entrepreneurial spirit. Although I have an MBA and managed websites and
IT departments for several Fortune 500 companies, I have always had other streams of income. i love to be a blogger
specially for business enterprenuers. Check out the Business
Loans Experts for rapid start of your business.
Published by Albert Bells on May 19th 2012 | Loans
Published by Caron Young on April 14th 2012 | Loans
Published by Micles Jonson on May 14th 2012 | Loans
Published by Gorgie Nork on June 19th 2012 | Loans
Published by Mathias Scott on March 7th 2012 | Loans
Published by Honard Nork on January 10th 2012 | Loans
Published by Merchant Cash on March 29th 2012 | Finance
Published by Nain Seek on May 9th 2012 | Loans
Published by Ricky Leyer on May 12th 2012 | Loans
Published by Jack Cook on March 19th 2012 | Loans
Published by Balvin Bart on May 11th 2012 | Loans
Published by Andrew Stomes on June 12th 2012 | Loans
Published by Rex Moshe on July 18th 2012 | Loans
Published by Albert Bells on May 26th 2012 | Loans
Published by Lewis Jasvin on April 11th 2012 | Loans
Published by Andrew Stomes on July 23rd 2012 | Loans
Published by Galvin Colton on June 7th 2012 | Loans
Published by Gamin Kils on January 20th 2012 | Loans
Published by Wade Martin on February 6th 2012 | Loans
Published by Alton Bells on November 29th 2011 | Loans