Merchant cash advances and unsecured commercial loans

An important advantage of unsecured commercial loans over traditional bank loans is that they do not require collateral. These unsecured commercial loans can be provided based on the entrepreneur's credit score, sometimes referred to as a signed loan. However, unless you have a foothold in a private lender, or if your business has a good reputation, you are likely to be ineligible for a very large loan amount—that is, if you can get a full loan.

If your business is not in good standing, but you do have an impeccable reputation, you may be able to get an unsecured corporate loan on your personal commitment. Still, if your day-to-day business can't keep up with your loan obligations, you'll be a last resort, and it still exposes your personal property.

On the other hand, it is much easier to withdraw funds from merchant cash advances, as this is not a loan and therefore does not depend on your credit rating. Credit value does not usually play a very important role in the approval cycle for corporate cash advances, as credit is reimbursed from the Visa-MasterCard sales generated by your business on a daily basis.

Merchant cash advances are actually from discounted purchases of your future credit card receipts by the cash advance provider, so it does not force you to make a fixed monthly repayment like a traditional bank loan. You should avoid reaching an agreement with any merchant cash advance agent that requires you to provide collateral or provide personal guarantees – such transactions are not required at all.

The percentage approval of commercial loans is surprisingly higher than the approved percentage of unsecured commercial loans, and it is also possible to obtain more funds through this method.

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