As far as small business funding goes, merchant cash advances already have some of the highest approval rates as compared with alternative sources of funding. Furthermore, merchant cash advance lenders understand that many businesses who apply for funding need the cash as quickly as possible, which makes this source of funding among the fastest ways to get cash for your business. Because merchant cash advance providers are willing to overlook a bad personal credit score, and they don’t ask business owners to provide collateral, merchant cash advances are inherently easier to receive than traditional bank loans. However, there are still steps that small businesses can take to ensure that they will be approved for a merchant cash advance, and that they can will receive the money for their business as quickly as possible once they are approved:
Eligibility Requirements – First, although it might seem self-explanatory, you need to make sure that your business qualifies for a business cash advance. Business cash advance providers require that you have been in business for at least 6 months and that you process at least $4,000 a month in either: Cash Flow/Deposits AND / OR credit card processor transactions. If you arent doing at least 50k annually in sales, you likely wont qualify for an advance. If you meet these requirements, you are already on your way to approval.
Carefully fill out your application – One of the most common mistakes that small business owners make upon applying for a merchant cash advance is not filling in or including all of the required information and documents when submitting their application. Most merchant cash advance lenders require that you provide the previous three or more months of credit card and bank statements, as well as a photo ID, and in some cases, a voided check. And, of course, always double check that the information you are providing is true; if it is proven incorrect or irrelevant, the lending company will reject it on grounds of fraud.
Stick to one merchant cash advance provider – Even if you are in need of emergency funding, it is wise not to apply for merchant cash advances through several different lenders. Communicate with your provider about the rates you have been offered by other companies and see if they are willing to negotiate. Working with multiple providers at the same time can ultimately be costly for both the lenders as well as your business.
Always communicate with your provider Another common problem that small business owners face during the application process is bad communication with their cash advance lender. Because time is of the essence, it is important to stay as easy to contact as possible and let your provider know where you stand in the application process. Along with the applicant, it is also in the best interest of the lender to make sure that the business is funded as quickly as possible, so the business’ involvement in the application process is very important for both parties.