Credit card machine loans otherwise known as a merchant cash advance or business cash advance is a business loan that works with your credit and debit card sales. Usually, the funding is provided based on your monthly card turnover. For example, if your business turnover £5000 on credit and debit card sales then you could raise the same amount in the form of a cash advance.
Unlike other types of business finance where you are usually expected to repay a set, agreed monthly amount to repay your loan, a cash advance works by repaying only when you make a sale via your PDQ card machine.
This helps your business with cashflow. For example if your business has a poor month on sales then you would only be paying back in line with those sales – in other words less for that month. And, on the other hand, if your business has an especially good month on sales you would pay back in line with those sales and therefore be paying back more. This, of course, means that your business is not under pressure to meet set payments which you find with traditional commercial loans.
The trouble with traditional business lending is that you could be faced with penalties, fees and charges if you don’t meet set payments. Worse still you will often find that these traditional bank style business loans are secured against your property or another asset which means they could be at risk if your business fails to meet the loan obligations.
A merchant cash advance carries none of this fear. It is firstly an unsecured business loan meaning you don’t have to secure a property or asset against the value, there are no fees, hidden charges or penalties associated with it. There is just a single agreed repayment figure and an agreed comfortable percentage of each future card sale that goes to repay the loan.
The loan can be used for any purpose too, from general day to day cashflow, unexpected tax bills, buying more stock, refurbishment, buying new premises or purchasing a company vehicle. The list goes on. There is no lengthy paperwork business plan requirement or meetings often associated with bank funding. If you would like to know more about the product in more detail and how it can help your business contact us today.