The Benefits of Payroll Financing Instead of Merchant Cash Advances for Small Businesses
For a small business, there are not a lot of options for instant business financing, which is why it is so important to choose the right company the first time. To do this, you might need to know the benefits of payroll financing instead of merchant cash advances for small businesses.
When looking for quick business financing, you must have all the facts and carefully weigh all pros and cons. For example, there are numerous differences between merchant cash advances and payroll financing and making the wrong choice could cost you thousands of dollars as well as wasted time.
The Advantages of Payroll Financing
In an average month, there are a variety of business expenses you must contend with, such as purchasing supplies and rent or mortgage. There are also unexpected events, slow sales periods and emergencies that can quickly deplete your cash and cause you to fall behind.
One of the best advantages of payroll financing is that it can be used for any business purpose, not just making payroll. You can also use the money to build a working capital fund to remove some of the pressures that come with running a small business and needing fast cash now.
When receiving quick business funding from Financing Solutions (www.fundmypayroll.com), you don’t have to make a long term commitment. Most of their clients are able to pay the money back in a few short weeks or months. Additionally, there are no early repayment penalties.
It is also important to note that Financing Solutions does not charge expensive fees for their services. There are no hidden charges or unexpected costs, making this option less expensive than other short term business funding sources.
The Downside of Merchant Cash Advances
With a merchant cash advance, you can receive money in exchange for expected credit card sales. In other words, if you have customers who paid for your goods or services with a credit card and you are waiting for those payments to come in, you can receive cash based on that money.
Unlike a bank, merchant cash advance companies do not require collateral. Sure, you can get money quicker than if you applied for a bank loan but in the case of merchant cash advances, the downsides may far outweigh the benefits.
Perhaps the biggest disadvantage of merchant cash advances is that the money is tied to your credit card receipts. They also impose various rules for how you are allowed to handle credit card payments, such as preventing you from offering discounts for cash purchases, moving your business or anything that could affect credit card sales.
In addition, merchant cash advance companies charge ridiculous fees, sometimes up to 200 percent of the original cost of your advance. It is crucial to ask about this issue up front.
Top Benefits of Being a Small Business Owner
With all the hassles that come from being an entrepreneur, you may not often think of the numerous benefits. Sometimes, it is critical to metaphorically stop and smell the roses.
For one thing, entrepreneurs typically have a better relationship with customers. You are able to provide more personalized, one-on-one service that the bigger guys just can’t do. Also, you can make decisions about what is best for your company without various layers of bureaucracy and varying state laws.
Another benefit is the freedom to choose a cash advance company, like Financing Solutions for instant business financing. They can make the job of an entrepreneur much easier.