Business Funding Options Guide

Bank Loans

⋆⋆

Pros:
• Low cost
• Convenient
• Long term

Cons:
• Strict requirements
• Requires collateral
• Requires excellent credit profile

Bank loans are an excellent method of business financing for those who qualify. With most banks, merchants can get a large sum of money to invest into their small businesses. But in order to be eligible to receive the loan, they must have excellent credit scores, lots of collateral, significant experience and be able to convince the bank that they will be able to repay the loan.

Some banks may have low interest rates, but usually, payments must be made on a monthly basis, with penalties for late payments and/or early repayment completion.

Equipment Leasing

⋆⋆

Pros:
• Cost effective
• Simple application
• Fast process

Cons:
• Only for equipment

Equipment leasing is a convenient way for merchants to get all of the equipment they need for their businesses without paying for it in whole at one time. Equipment can be very expensive, and when a merchant decides to lease equipment, he/she is permitted to use equipment when he/she agrees to make monthly payments on the equipment. Some equipment leasing companies even allow merchants to rent-to-own equipment.

If a merchant needs more than equipment, however, equipment leasing will not be beneficial. Since the merchant does not own the equipment, it can not be sold in order to be liquidated and the merchant may still need additional cash to purchase inventory, finance advertising or for working capital.

Venture Capital

⋆⋆

Pros:
• Obtain the capital you need

Cons:
• You may loose control of your business

New small business owners can receive venture capital from a venture capitalist (a person who makes venture investments).

Venture capital is convenient for startup merchants because merchants do not need to have extensive experience to receive venture capital. Instead, venture capitalists invest a significant amount of money into a business in exchange for shares in the company.

The venture capitalist also brings "managerial and technical expertise" which can be both good and bad for a merchant. The merchant can go to the venture capitalist for advice when needed, but the venture capitalist can also make decisions for the business that the merchant may not agree with, as venture capitalists often receive a "significant portion of the company's ownership."

Personal Savings

⋆⋆⋆

Pros:
• No wait time
• No interest rate to pay

Cons:
• Added risk

Many merchants use money from their personal savings accounts to finance their small businesses. The problem is most merchants still need more cash for their businesses after utilizing their own savings.

One great part about personal savings is there is no application process, there is no need to wait for approval and the merchant can access the cash immediately. Unfortunately, once the savings is depleted, the merchant must spend a significant amount of time rebuilding his/her personal savings before he/she has enough money to add on to business funds again.

Merchant Cash Advance

⋆⋆⋆⋆

Pros:
• Fast funding process
• No collateral required
• Minimal paperwork
• Cash flow friendly
• Excellent credit not required

Cons:
• Expensive money

Merchant cash advances are very convenient for merchants (owners of retail and/or service-oriented businesses). To qualify for a merchant loan, a merchant only needs to have owned his/her business for four months. That business must also process a minimum of $5,000 in monthly credit card sales.

The time from application to funding can be as little as two weeks, allowing merchants to get the cash they need for their small businesses in a timely manner.

Merchant loan repayments are perfect for retail and/or service-oriented business owners, because repayments are automatically deducted as a small percentage from the business's daily credit card sales. Therefore if a business's credit card sales drop during a particular month, the business's merchant loan repayment amount will also drop for that month without any penalty to the borrower.

Merchant loans can also be renewed. After a merchant has completed 60 percent of his/her merchant loan repayment he/she can get an additional sum of cash wired into the account of his/her choice. This can be done as many times as the merchant wishes!

Based on our rating system, which takes approval time, funding speed, ease of repayments and renewal, and convenience into account, merchant loans are one of the best types of business funding for merchants.

Complete our online form and a funding specialist will contact you in 24 hours. You can have cash for your business sooner than you think!