Businesses require a continuous cash flow to keep their operations running. However, if there is an imbalance in the cash flow, they may require business loans to fulfill their needs for funds. There are various options for merchant business loans available today, and choosing the best one for your business is crucial. You will need to consider a few factors to decide which business loan is the best for you.
What Type of Business Loan is Best?
Let us see the various types of business loans and how to vet those-
#1- Term Loans: A term loan is a merchant loan option best for upfront cash, where you get a lump sum of the loan amount, which you can repay over a set time period called a loan term. These are best suited for business owners with a good credit history looking for quick funds for expansion.
#2- SBA Loans: Businesses looking for expansion or refinancing existing debts can apply for SBA loans which the small business administration guarantees. The repayment terms for merchant services small business loans vary according to the individual case and can range from seven years to twenty-five years.
#3- Business Lines of Credit: A first merchant’s business line of credit is a very flexible loan option where you only pay interest on the money that you have drawn. You can also borrow cash during repayment without having to fill in a new loan application. These are also typically unsecured, and your bank or lending institute will not ask for collateral. These are best for handling seasonal expenses, unexpected payments, and short-term financial requirements. They are also helpful in managing cash flow.
#4- Equipment Loans: These loans are perfect for businesses that want to own their equipment instead of renting them. The term for an equipment loan is equal to the life span of the equipment purchased, and the collateral is the equipment itself.
#5- Invoice Factoring: Businesses who often experience lags in invoice payments from their clients can use invoice factoring companies to maintain their cash flow. The lender will then be responsible for collecting the due amounts from the customers.
#6- Invoice Financing: Invoice financing is the same as invoice factoring. However, in the former, the business will only use the unpaid invoices as collateral to borrow money from the lender, while in invoice factoring, the company sells the due invoices.
#7- Merchant Cash Advances: Businesses with high credit card sales that can handle frequent repayments often opt for merchant cash advances. Your lender gives you a lump sum amount upfront that you repay by withholding a percentage of your daily credit or debit card sales.
About Total Merchant Resources-
Are you looking for business loans on credit card sales? Total Merchant Resources has reinvented small business financing by offering reasonable credit standards, minimal documentation requirements, and fast approval. Total Merchant Resources’ financing empowers you, the small business owner, so that you never again have to let small capital needs stand in the way of big business opportunities. Our products include small business loans, line of credit, equipment leasing, fix and flip programs, and web services. Call us at +1 (732) 671-5710, email us, or visit our website for more information about our services.