Revisiting Why A Merchant Cash Advance Is A Better Option Than A Bank Loan

It would appear that banks have made it far too difficult for small and medium-sized business owners in Canada to secure loans to grow their companies. Unfortunately, business owners from all over this great country of ours have tried and failed in the “get a bank loan” department. As a result, many of them assume that they can’t afford their plans for business growth.

Why are so many business owners being turned down by their banks?

There are numerous factors. They include an inability to put up collateral. Banks, you see, need to ensure that they will receive their money back when they loan it to a business owner. If that business owner is unable to put anything on the line that the bank can take over in the event that payments aren’t made, the bank doesn’t feel safe in lending the cash.

According to Entrepreneur.com, a poor understanding about credit scores is one of the primary reasons small business owners can’t obtain bank loans. The website notes that according to a Small Business American Dream Gap Report, “some 45 percent of entrepreneurs surveyed didn’t even know they had a business credit score, and 72 percent didn’t know where to find information about it. Even when they did, more than eight in ten small-business owners surveyed acknowledged that they didn’t know how to interpret their score.”

What can lead to a poor credit score?

An inability to make timely payments to a lender will hurt your credit score. That includes credit card payments and any other debts that may be the responsibility of a collection agency to secure. If you have a poor credit score, don’t expect the bank to help you. “If a business with a poor credit history — or none at all — is denied financing, lenders are not required to notify the owner of the reason for the rejection,” says Entrepreneur.com.

What makes a merchant cash advance a better alternative to a bank loan?

There are many reasons. Perhaps, of particular interest, at this point, is the fact that no credit checks are necessary! As well, no collateral is required. The process by which a merchant is approved for a cash advance is far different than that of a bank loan. Merchant cash advances are approved based on a merchant’s credit card and debit card sales.

By reviewing your average monthly sales via credit card and debit card, Canadian POS Corporation can offer you a free, no obligation quote for a merchant cash advance. That quote involves the amount of money you are eligible for and the exact one-time fee that it will cost you to accept the advance. There is also no interest rate. By accepting the advance, you will know, right away, the total amount of your repayment. As well, there is no time limit for you to pay back the advance as repayment is made through a small percentage of your future sales.

Because repayment is done automatically, you will only be making payments when you are paid first. That means that there is no minimum due on a monthly basis. You have no payment schedule. Plus, with no interest rate, you don’t run the risk of having to pay back more than you originally expected. And, of course, you won’t have to worry about your acceptance of the merchant cash advance ever impacting your credit rating!

For more information about our merchant cash advance program or to get your free, no obligation quote, call Canadian POS Corporation at 1-877-748-2884 or email us at info@localhost.