How Do Merchant Cash Advances Compare to Alternatives?

If you have any small business, then you know the difficulty which the business can face due to the shortage of cash. In this case, merchant cash advance Canada can be the savior of the business. There are many companies which offer the same types of loan to the small businesses. However, the experts think that the merchant cash advance is the best way to retain the cash flow of your company.

merchant cash advance Canada

What Is Merchant Cash Advances

Before you decide to take any steps you should definitely know more about the merchant cash advances.  Here is a list of pros and cons of this type of cash advance companies.

  • Pros: The main advantage of a merchant cash advance Canada is the repayment method. If you take money from such companies you do not need to pay back the money in regular fixed installments. Instead, you repay the money with a fixed percentage of the debit and credit card transactions that your company have every day.

This process gives you a lot of latitudes and never puts pressure on you. If you do not do good business in a month the payment of the money will be low. However, on the good months, the payments will be high automatically. Plus, you do not need to produce any security for the money which you are borrowing. The reason is that the merchant cash advance Canada companies already have access to your accounts.

  • Cons: The obvious problem is that your business needs to do credit and debit card transactions to get the money for your company. You also need to have at least 12 months transaction history to borrow the required amount of money from the merchant cash advance Canada companies.

Canada merchant cash advance

Alternative Loaning Companies

There are many companies which provide loans to small companies. To make the right decision you also need to know about those companies as well. Here is a list of companies and their descriptions which will help you out.

Start-Up Loans

  • Pros: Even if you are just starting your company, in this process you can avail loans.
  • Cons: The problem for the small business owners is that their business is not starting. They have an established business. Along with that, this type of loan is not considered as business loans.

Business Loans

  • Pro: The name tells the purpose of this type of loans. In this case, you do not have to put your own credit score at risk to get such loans. In fact, you can get a sizeable amount to aid your business which you can repay in installments.
  • Cons: There might be some stringent rules which can bar you from getting this loan. In most cases, these types of loans are offered to the businesses which already have a certain reputation. This can be a difficulty which can be a problem for your small business.

Canada merchant cash advance

Personal Loan

  • Pro: If you do not want your business to be involved in any kind of loans, then this is the right kind of loans that you should be taking. In this, you personally are responsible for the borrowed amount.
  • Con: The most important negative point is the rate of interest. In these types of loans, the interest rates are often very high. To get such loans, you also have to have high credit scores in your pocket.

The main point of taking any loan is to float your business. The experts think that the merchant cash advance Canada does just that. Thus, it is wise for you to understand which loan option is best and then take the plunge.