Online lenders have provided much needed respite for small and medium sized businesses across industries, providing them with capital to cover their funding needs. Online lenders have tweaked their products to come up with more innovative options to meet any funding requirements, regardless of the purpose.
One of the most innovative lending options in the industry right now is the “Pay As You Trade” cash advance, introduced by UK’s Merchant Money in 2015. This product is specifically designed for businesses that accept card payments.
A merchant cash advance is different than a loan in that the funding provider essentially pre-purchases some of your credit card transactions, “advancing” the money to the you. They will “owe” some of your future sales, and will collect the money from those sales. Unlike loans, cash advances technically don’t have an interest rate, or a set repayment period. Instead, the provider takes a percentage of all future credit card sales until you have repaid the balance and the fee agreed on.
With the cash advance product, Merchant Money advances cash upfront within 24 hours, should you qualify for the loan. Traditional online lenders will advance the same cash to you often within a period of 10 days and while this is relatively faster than banks, 24 hours sounds like a better option.
On average, lenders will require that your business should have been in operation for at least a year. With Merchant Money’s business cash advance, you need to have only been in operation for over 6 months to be eligible. Overall, this model is more forgiving than the average cash advance from any other lender in the UK.
You can qualify from £3,500 up to £500,000, which is broad enough to satisfy the funding requirements of almost any SME in the UK. The beauty of a cash advance is that you only pay your finance provider based on how well your business does. You only pay back when you make card sales and this payback is based on a percentage of your total monthly card sales, not a fixed monthly repayment. Because repayments rise and fall with your sales, you’ll never need to worry about being short at the end of the month. And because there’s no fixed term to the repayments, there’s never really any pressure. All of the benefits make Merchant Money’s cash advance product stand a head above the rest.