What are the basic qualifications for a merchant cash advance? Well, for starters, a person needs to be employed in the business industry. He/she must also have an established credit history, especially for that particular type of loan, as the cash advance has a very strict approval procedure.
The applicant must also make the minimum monthly payments
They will not allow any pre-payment to apply for one of these loans. Of course, the interest rate on these loans can be high, but they may be necessary in times of economic hardship.
A person with any kind of business is eligible for one of these loans. And business must be at least two years old in order to qualify. While a person who is in the service industry is still employed by the company, a person who has left a company and has no means of income is considered a business owner.
A person with a decent credit history will probably qualify for the best rates on a merchant cash advance. Of course, it is also good to have good credit, or you will have trouble getting another one. The best person for a merchant cash advance is someone who has had a good credit history.
Time and again, a person with a bad credit score is turned down for this type of loan. This is because the lender does not want to risk having his/her money tied up in the company. The actual APR for these loans is calculated based on the total amount of money borrowed, divided by the number of months that it will take to pay off the balance.
Since so many potential merchants are turning to these loans, it is important that the borrower be very careful about what company he/she chooses to use. Some companies, especially the bad ones, will try to take advantage of someone who is desperate for cash.
A lot of borrowers have been scammed by this kind of business
So, how do you find a reputable company for a merchant cash advance? First of all, when searching online, be sure to check for independent, third-party reviews. The online broker should also have a history of positive customer feedback.
A good broker should offer both a borrower and the lender an instant quote. This way, a borrower will know exactly what he/she is borrowing and the terms of repayment. A broker should also explain to the borrower how much money he/she can borrow and how much interest will be charged for the loan.
Another thing that a broker should offer is the merchant cash advance with no upfront fees. That is, if a company offers a loan for 0%, ask them if there are any hidden fees that will be added to the total cost of the loan. The brokers must be upfront about all fees, especially if they are not upfront about their approval rate.
It is also good to know how much interest will be charged for the loan in the future. There are some companies that allow the borrower to choose a fixed interest rate, with the result that the monthly payment will remain the same. Other companies will charge a variable interest rate that can change.
A borrower should also learn how a merchant cash advance works
Most companies will require the borrower to meet a certain amount of obligations to ensure that the application is considered complete. They will then review the application, and if everything checks out, the business will make a decision regarding the approval of the loan.
Be sure to submit a complete application and not just a few points to get your application approved. The lender can check out the complete package and choose which option would be best for the company. You should not worry about the terms or conditions of the loan, as the lender will deal with those issues.