The Pros and Cons of Merchant Cash Advances for Small Businesses on Epsilon Business Credit

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Giralang - Epsilon Business Credit, a blog featuring valuable tips about business credit, gives entrepreneurs the pros and cons of merchant cash advances small businesses. As more small businesses are turning to merchant cash advances as a last resort, the blog aims to equip entrepreneurs with the proper information they need in order to make the wisest decision for their business.



According to the site, merchant cash advances are usually made available in a lump sum to small businesses that couldn't secure financing anywhere else. To acquire this type of financing, the borrower is contractually obligated to reimburse it through a percentage of future sales. The lender determines a borrower's eligibility based on the strength of the business's performance. Such a financial opportunity has its pros and cons.



“If you are researching unique financing options for your small business, you may have come across websites offering merchant cash advances,” says the Epsilon Business Credit post, “Merchant Cash Advances For Small Businesses”. “This financing option may be ideal in certain situations, but it is important for small business owners to understand the costs associated with a cash advance before moving forward with the application.”



Merchant cash advances can benefit a small business in a number of ways. One way is by gaining instant capital for operation expenses, like office supplies and inventory, without paying any upfront costs. Small businesses don't have to report merchant cash advances, which in turn doesn't impact the credit rating. Approval rates are high and the application process is usually fast and simple, under a week. The only qualifications for approval are the small business's longevity and credit card sales volume.



With any advantages come disadvantages, and the biggest con of merchant cash advances is that there is no regulation of merchant cash advances. This loophole gives lenders the freedom to set policies and payback details as they see fit. However, a small business could avoid this downfall if they can collaborate with a trustworthy lender. Merchant cash advances carry high interest rates the lender sets, usually between 60 and 200 percent annual percentage rate (APR). As a result of such high APRs, merchant cash advances can hurt more than help a small business's budget. In the end, they could cost the small business more money than a traditional bank loan.



About Epsilon Business Credit



Epsilon Business Credit is dedicated to providing quality information on multiple topics of business credit, including but not limited to business loans, business credit cards, SBA business loans, small business factoring, business credit ratings, commercial equipment financing, and small business loan application. Reviews, advice, and tips on business credit are at internet users' disposal, formatted as a blog to deliver the most up-to-date information; their website is http://epsilonbusinesscredit.com.



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Chris Young

88 Baracchi Crescent

Giralang

c.young@epsilonbusinesscredit.com

047-811-1401

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