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Let’s cut to the chase and talk about the ‘negatives’ regarding a merchant cash advance. The biggest objection is price – a merchant advance is expensive money. We’re not going to dispute this fact, at least not for our product; rather we want to tell you what you’re paying for – convenience.
• When you want to go from Chicago to New York , but you don’t want the long drive, what do you do? You buy a flight.
• When you don’t feel like slaving over a hot stove to cook a meal, what do you do? You visit a restaurant.
• When you need new suits, you don’t bring out the sewing machine, you pay a visit to the mall.
Each of these three statements offer two solutions to a problem, but one solution is more convenient and is also more expensive. This isn’t a coincidence. Convenience costs money. It’s more expensive to fly than drive. It’s more expensive to buy a meal than preparing it at home. It’s more expensive to buy clothes than to make them. We can accept that we pay more for convenience in many areas of life – but it seems to be an issue when discussing business financing.
You can prepare a business plan, go to the bank and fill in long applications, and invest in strong collateral to get funds for your business — or you can get a merchant cash advance.
Breaking down the differences: Merchant Cash Advance v. Business Loan
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Merchant Cash Advance |
Business Loan |
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Business plan not required |
Prepare a detailed business plan with cash flow analysis |
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1-page application |
Multi-page, multiform application process |
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No collateral is needed |
Need to have approved collateral to secure funds |
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Approval takes days |
Approval takes weeks |
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Payment is determined by your revenue |
Payment is a fixed amount |
In addition to these differences, the merchant cash advance casts a wider net, qualifying more types of businesses, including those with imperfect credit and offers no restrictions on how you use the money. Plus have you visited the website of one of the big banks like Bank of America, Citibank or Chase? It even takes work to find the small business loan page!
When you buy that flight, you’re not just paying to get from point A to B, you’re paying for convenience. When you eat out at a nice restaurant, you’re not just paying for food, you’re paying for convenience, and when you choose to use a merchant cash advance, you’re not just paying to borrow, you’re paying for convenience. If you can afford to wait to qualify for a bank loan, then start lining up your ducks, but if you want the convenience of having a quicker, simpler solution, then start your application today.