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There is currently a genuine state of confusion regarding commercial loan rates. The confusion is not just restricted to borrowers, either. Brokers, lenders and professional investors are all struggling to get a handle on what is going on with commercial loan rates.

Borrowers are under the impression that we’re at historic lows. They hear about the feds lowering rates and also hear national banks quote ridiculously low rates. What these national banks aren’t advertising is that their decline rates are at historic highs. Is difficult to be able to track a statistics like this but my friends and associates that work at intuitions like Bank of America, CITI etc tell me that there decline rate are at 95% or so.

So what that means is that they are cherry picking to an incredible degree (can you blame them?). The low commercial loan rates that they are advertising are only relevant for 5% of the borrowers that apply. Think about that for a moment, for every 100 people that fill out those 6 page applications, provide their tax return, etc, 95 of them are getting declined. As a comparison the decline rates are normally more like 50%.

The confusion is not just restricted to borrowers but to professionals in the industry as well. The spreads or margin are varying from one lender to the next more than we have seen. People in the business are struggling to understand why. Normally if you were to get 10 quotes on the same deal the commercial loan rates would be within .25 -. 35% of each other. Perhaps a few would tweak the prepayments or term, etc but their rates would be close. Now we are seeing commercial loan rates on the same deal varying between 2% -3%…

Part of the problem is that some of the lenders and banks themselves are having their cost of capital increase. Some of their credit rating are being lowered, as their balance sheets are scrutinised. So despite the Feds lower their rates, the margins that the banks charge (in order to cover their costs, risk and make a profit) go up as their cost of capital go up. So as one bank is more financial healthy than the next its costs of capital varies.

So what’s the happy ending? We currently don’t have one. If you’re thinking of buying or refinancing a commercial property in the next few months we would suggest getting it done now as in maybe a while before things re-stabilize and commercial loan rates become more universal.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $4.95! Check it out commercial mortgage broker store or commercial loan rates

It time again to revisit alternative financing strategies for business owners needing money. Whether your business needs capital to grow, meet payroll, or to just simply survive, there are numerous alternatives for your company when banks so ‘NO’.

Personal loans are no longer viable options for business owners. Banks have tightened their purse strings on personal credit just as they have with business credit. This tightening typically does not have anything to do with the state of your credit or the value of your collateral. But more reflects their past indiscretions with their depositors’ money. Further, most business owners, over the last two or three years, have already encumbered all of their personal assets, leaving nothing of value to collateralize.

The following lists many alternatives that may still be available to your business. These alternatives allow business owners to capitalize on their previous hard work; be it from building relationships with suppliers and other business partners to closing sales and building a strong customer base:

Using Your Business Relationships!

Trade Credit: It never hurts to work with your suppliers. Ask for better terms; either more discounts or longer time for payment. Here you can reduce your overall costs or allow more time to collect money from your customer before payment is due to these suppliers. Now, your suppliers may baulk at this discussion as they are probably feeling the same pinch as you are. However, impress upon them that it does their business no good (short term or long-term) if you go out of business, have to cut back your standard orders, or are forced to find other suppliers who offer better terms.

In conjunction with trade credit, do all that you can to collect your receivables from your customers, as soon as possible. If your suppliers offer you discounts for early payment, offer the same to your customers (just maybe not at the same magnitude) or offer discounts for cash. This allows you to collect payments faster as well as reduce you costs by paying less for the goods you need to run your business. Just remember, in this type of economy, cash is king.

Using The Strength of Your Customers!

Receivables and/or Purchase Orders: If your business has accounts receivables sitting on its book just waiting to be collected, you maybe able to get cash for those assets NOW. There are cash advance companies (not banks) that specialize in purchasing your receivables. Companies like Bridgeport Capital Service, RTS Financial Services, or Paragon Financial Group. These companies will purchase your invoices for up to 90% of their amount. They will then work with your customers to collect these receivables (saving you both time and money on collection). When the invoices are paid, these companies will refund to you the remaining 10% of the invoice amount. This type of funding is great for struggling companies as these cash advance businesses will focus more on your customers’ credit and business strengths than your.

Many of these same companies will also finance your purchase orders. If you place an order with your suppliers and agree to pay for their goods over time, these cash advance companies will finance these agreements. This could allow your business the opportunity to take advantage of trade discounts (percentages off the purchase amount) as your company will have immediate cash to satisfy your supplier. This is very similar to having a line of credit with your bank but as an individual credit facility for each purchase.

Credit Cards: I not saying go out and get more credit cards. If your business accepts credit cards, there are companies (again, not banks) that may advance cash to your company based on your FUTURE credit card receipts. These facilities are only paid back when your business generates credit card sales. Thus, if you have a slow month, you are not stuck with a huge monthly loan payment. As your credit card sales ebb and flow, your repayment of these advances will ebb and flow in tandem.

Using Your Character!

Need just a small amount of cash to get you by? Try social lending sites like All World Private Funding!, Zopa, Prosper, or Lending Club. These sites create peer-to-peer lending in which ordinary people, who have additional cash, can review your request and contribute to the funding of your loan. The benefits of these programs include getting the money you need, possible lower rates and better terms than most banks offer, and you get to tell your story directly to the lenders.

Similarly, there is Micro-Credit companies. The largest in the US and around the world is ACCION USA. Micro-finance companies limit their total out lay to a maximum of $25,000 per loan. However, most micro-credit funders like to build relationships first with their borrowers. Thus, they may only approve smaller amounts in the beginning and increase your loan amount as you pay back each facility. These companies will also work with startup firms or those that have been turned down by traditional banks and other financial institutions.

Never forget your friends and family. These are the people who know you best and may better understand what you are trying to do with your business. There are many cons with borrowing money from those closest to you but new companies like Virgin Money will help you manage this new relationship. Companies like Virgin will help you keep everything in a business like manner.

Now, while there is a lot of focus these days on traditional banks, most communities also have Credit Unions. Credit Unions are not-for-profit organizations. Thus, they do not have to worry about Wall Street or shareholders. While the majority of Credit Unions have yet to fully adopt commercial lending departments, they should have lending programs in place that will meet your business needs.

Some of these alternative options maybe a little more expensive, overall, then having a single credit facility with a bank. But, they are a sure fire way of leading your company through our current credit drought. The key to success is to do your homework. Find the program that best fits your needs and that will provide the greatest benefit at the lowest cost to your business. Some business owners tend to panic a bit when they begin to feel the credit pinch. It is only natural as raising money for your business is time consuming, time that can hardly be spared in these trying times. But, remember to think about the long term. Don’t just settle on the first source that gets approved, find the best fore you. Be diligent!

Joseph Lizio holds A MBA in Finance and is founder and owner of http://www.businessmoneytoday.com

Economic conditions changed dramatically due to problems encountered by the mortgage sector and global rising of fuel and food.

All of us are very cautious and are always on the look out for means to survive, here are some of them:

• Don’t Panic. How the stock markets behave defies laws of gravity. It goes up an hour and drops drastically in another. Experts advise though that withdrawing your investment money may do more harm than good. Cash out the money if you really need it short-term. Be reminded that through out history bad times come and go. After some time, the market will recover.

• Protect your Portfolio. When you put some eggs in the basket you make sure that they will not break. This is also the rule of thumb for investments. For example, financial experts advise that you check on your portfolios once a year and check how much the balances are. Make some adjustments so your assets are well distributed to different channels. The market volatility is an indicator that people should be diversified with their investments. Factors such as your age and risk tolerance should influence you long term. Remember that the current state of the economy is just temporary. Younger people can take more risks in terms of investing while the older generation must take lower investment risk to ensure better cash flow.

• Do not be Trapped by your Mortgage. The subprime mortgage disaster has affected the whole economy. Homeowners with adjustable rate mortgages should consider getting a long term fixed loan to avoid the voracious rate adjustments that may occur. Getting a refinancing is not that easy today. Lenders have taken measures to safeguard themselves and assets through higher interest rates and stricter qualification guidelines. If you have a good credit score take the opportunity to discuss with your lender better fixed rate loan packages that can be easier on your pocket and in the long term lead to owning that home.

• Pay Attention to your Job. Work hard during these hard times. Companies are on a wait and see situation where they have the tendency to lay off people when it becomes a necessity. Work hard so you will be a valuable asset of the company. Companies will see you as a good investment and will give you job security. If you are on a staff level, monitor how your boss and your department is performing. Knowing where you stand allow you to plan for the future.

• Handle your debt and save. It is essential to get rid of bills and save as much money as you can. In times of great need, you cannot easily rely on the value of your home which has dropped significantly because the economy is on shaky grounds. Determine if you really need something before spending that extra cash.

• Don’t spend on what you don’t need. Tough times should convince you to review your household budget. List down your expenses and strike out any thing which you think is not really essential. Necessity should be considered first before giving into the comforts of your lifestyle. Tighten the budget and put the extra money into your savings.

Blooming in very tough economic conditions involve making the right decisions at the right time. Spending less may mean survival until the economy recovers. For now, being ready for the worst is number one.

The author of this article was Benedict Yossarian. If you have taken a loan out in the UK within the past 10 years it is quite possible it could be classed as an unenforceable loan agreement if any clerical errors have been made. Consumer Credit Claims can help receive financial compensation for these incorrectly drafted loans.

Learning to use a forex chart will greatly improve your ability to become a profitable forex online trader. As with stock exchange investing there are several popular chart types used to visually analyse trading data. Some of the forex chart types include bar charts, candlestick charts and point and figure charts.

The forex chart can be very useful when looking to analyze markets when using technical analysis. The technical style of trading ignores fundamental factors and is only used with the price action of a market. This can be good to also remove the emotional effect trading has on your mental state.

With a forex chart you are able to see the movement of the market in a visual format. In addition to the standard chart you can add indicators or oscillators to help you make decisions about when to get in or out of your currency trades.

In case you do not know what an indicator is, it is a series of data points used to help predict movements in currencies. Some of the more popular indicators used on forex charts are moving averages, waves and bollinger bands.

Bar Charts – are quite often used in security market technical analysis. Bar charts are quite easy to construct making them quite popular. The charts are constructed by showing intra-day, daily, weekly or monthly movement as a vertical bar. Opening and closing prices are shown by horizontal marks to the left and right of the vertical bar respectively.

Candlestick Charts – were the secret weapon of the Japanese traders until Steven Nison of Merrill Lynch made the use of this chart popular in western markets. The candlestick chart is credited to Munehisa Homma, a Japanese rice trader in the early 18th century.

The candlestick is the graphic representation of the price bar: the open, high, low, and closing price of the period. The candlestick has become a widely used tool in online currency trading.

When you use the candlestick in your forex chart there are many patterns that you can learn to identify to help with your technical analysis. There are 12 you really should learn. Some of them include morning star, evening star, shooting star.

When using forex charts you should be using live data feeds. This means the data you are seeing in your forex charts is based on actual currency rates at the time you are viewing the chart.

To get your data and software for your forex charts you have free options and paid options. Quite often after selecting your forex broker you will receive some for of forex charting through their trading platform.

With the paid options you normally would pay for a data feed to construct your forex charts. This is typically a monthly subscription. You are quite often able to receive a free trial before committing to a subscription.

I currently use FXCM Trading Station and it comes with a built in forex chart. You can ask your broker what they recommend if you are wanting more advanced forex charting options.

If you are considering getting into the forex market and trading currencies I strongly recommend learning what you can about using a forex chart to help with your trading.

If you find this all too difficult you may instead wish to use a Forex signal service however this comes at a cost. It is always best to rely on your forex chart knowledge.

Looking for more forex trading information, visit forextradingonlineinfo.com. Sign up for the newsletter and receive a bonus report.

Many business people don’t know that equipment leases can be negotiated. They do a quick read-through of the contract, see that the monthly payments are what was represented, and sign where indicated. Not carefully reviewing each paragraph of the agreement can be costly. Long, drawn-out contracts are often developed by leasing companies to gain added revenues and advantages for themselves. Consequently, in this situation, it is to the detriment of the lessee.

This article discloses some of the terms and conditions that are contained in lease contracts, but can often be negotiated. A properly trained lease broker can be invaluable in helping the lessee discern the points of contention and negotiate a fair and equitable agreement.

1. Credit or commitment fees: Some leasing companies will charge you a fee simply to process the credit application. Others may charge a fee to keep the credit commitment open after the application has been approved. These are ridiculous fees that I would advise never paying.

2. End of term option: This is a critical point in the contract. Beware of language that allows you to buy the equipment at a “mutually acceptable price” as opposed to fair market value. When a lessor states they will sell you the equipment at a mutually acceptable price, they can back you into a corner by charging just about what they want. Fair market value and $1 buyout leases are legally defined and more quantifiable.

3. The never-ending lease: Some leasing companies try to lock you into a leasing situation forever and the only way to escape is to pay an inordinate fee. Beware of a lease that gives you three options at the end of the term: a. Buy the equipment at a “mutually agreeable price”. b. Extend the contract at a mutually agreeable price, or c. Return the equipment to the lessor and strike a new deal at a mutually agreeable price. These are all poor options for you, the lessee and only serve to benefit the profit of the leasing company.

4. Equipment pass title fees: These are fees that some lessors charge when the lessee chooses to buy the equipment at the end of the lease term and obtain clear title. These fees can be as high as $250 or more.

5. “Put” at end of lease: Make sure that you have an option to buy the equipment at the end of the lease and not a put. A put may result in lower monthly payments, but requires you to buy the equipment, as opposed to an option, which gives you a choice.

6. Delayed payment to vendor: Some leasing firms delay payment to the vendor for the purpose of increasing their yield. This is unethical, creates a hardship for the vendor, and makes your company appear in a bad light.

7. Up-front broker fees:Some lease brokers charge an up-front fee at the onset of the relationship. I have never charged such a fee because my compensation is based upon a successful completion of the transaction and is a percentage of the amount funded.

These are some of the items to look for when reviewing an equipment lease. Keep in mind that competition among leasing companies is intense and they do not want to lose your business. Do not be shy about asking that these fees be taken out of the agreement.

Kent Harlan has been a CPA since 1984 and has provided consulting, accounting and financial services to several industries. He is the owner of Ozarks Capital Funding, LLC, a Springfield, MO based company offering business and heatlhcare financing.

Does your company need to finance new equipment or refinance your existing inventory of equipment? click here to apply.

EMAIL: kenth@ocflink.com
WEB: http://www.ocflink.com
PHONE: 417.849.7394

As the credit crisis deepens, many borrowers are realizing that working with a commercial mortgage broker makes a lot of sense and is more important than ever. Virtually all banks and lenders have severely tighten their credit standard to the point that most borrowers are having a very difficult time finding any banks that will even consider their loan request.

Bottom line, 95% of all commercial mortgage loan requests are being turned down cold. So one of the keys here for the borrower is to figure out which banks are still really funding deals and how to structure the loan request so that it has the highest likely hood of closing. And good commercial mortgage brokers knows both.

Tapping the experience and resources of a commercial mortgage broker is an excellent way to do this. A knowledgeable commercial mortgage broker is in essence shopping banks and lenders everyday and everyday for years. The good ones know what is going on behinds the scenes with banks as they have long term relationships with associates that inform them of any internal issues. The folks in the bank know how important the broker is to their personal success and will not miss lead the commercial mortgage broker, in fear of destroying future business. So a commercial mortgage broker worth his “salt” should be able to take you to a bank or lender that’s in a valid position to fund your loan.

An important point here is that commercial mortgage brokers are in essence on the same side of the table as the borrower. They get paid when the loan closes. Most do not make hourly consulting fees, etc. They invest their time, effort and resources into your deal and are betting they can get it done. If they are experienced, they will only take your deal to a bank that can really close it.

Keep in mind one of the annoying problems out there for borrowers shopping banks on their own is that many bank loan officers have many quotas besides closing loans… most of these quotas go against the borrowers goal of closing their loan. For example, bank loan officers have weekly meeting and loan application quotas. So they may try to schedule a meeting with you and get you to fill out a loan application and send in all tax returns/financials even though they know they can’t get the loan funded.

They are trying to save their job. Again, they get to justify their job with their manager at your expense and your time.

Good, experienced, commercial mortgage brokers can save you a lot of time and energy by taking you right to the most viable banks from the beginning. And, believe it or not, they can also save you a lot of money as well.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan a national commercial mortgage brokerage firm. 248 885-8797. He also has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $5. Check it out commercial real estate loans or commercial mortgage brokers

A good credit score is your key to the best deals during this uncertain financial climate. A decent credit score can win you the best rates for financial loans and can place you on that job that you have been wanting.

You can negotiate for bargains for almost any deal when you have a good credit score. A FICO score of at least 700 is considered a good one. For example, a 760 FICO score may translate to a very competitive 6.11% interest rate on a 30 year fixed three hundred thousand dollar home loan. Compare it to a deal if you have a score of 620, banks will give the same loan for 7.42%.

A very good credit score will provide you leverage to get what you need and want.

What a Good Score can Bring

When you have a score of 700 up creditors and lender consider you as a low risk borrower. Here are some of the perks that your good FICO can give you:

• Job Offers- Companies see a good credit score as a reflection of one’s overall character. A credit report may be pulled by employers as part of their screening process. It is not a favorable picture therefore when an Ivy League graduate goes out of the real world with a messy student debt. According to studies, financial stress affects the productivity of employees.

• Lower Interest Rates- this is true for credit cards, home loans, and auto loans. A 30 point raise in your credit score can save you a lot of money on those finance charges

• Insurance- Auto and home insurers evaluate an applicant’s credit score to study the risk of issuing a policy at a certain monthly premium. Trending has shown that people with good credit score tend to make lesser claim over the years. This can be attributed to good financial habits leading to more careful driving or paying house bills on time.

• Utility Service- Credit scores may affect how utility companies can consider waiving some of those deposits to avail of their service. Even cable and phone companies consider a good credit score as a lower risk for their business.

Using your Credit Score to Your Advantage

You deserve to utilize a good credit score to your benefit. If a card company calls you to offer a balance transfer for a lower interest rate, evaluate the offer first and see what the total picture is. If you know you have a good credit score, negotiate for the best deal that you can get.

Be savvy when dealing with credit card companies or other lenders who may be doing business with a lot of bad credit histories. A business will be more than willing to gain or retain their good client.

If you are shopping for the best rates, do not look for too long or too often. In some way, this will hurt your credit score since multiple companies will be pulling your report even if you’re just looking for one loan.

Safeguards have been devised such that multiple inquiries for home loans and auto loans will just be considered as a single inquiry if done in a fourteen-day span.

Maintaining a good credit score can be a tough task. A single decision error can drop you credit score by the tens or hundreds. To avoid that be careful with your dealings and read every fine print in any contract before signing.

The author of this article was Benedict Yossarian. If you have taken a loan out in the UK within the past 10 years it is quite possible it could be classed as an unenforceable loan agreement if any clerical errors have been made. Consumer Credit Claims can help receive financial compensation for these incorrectly drafted loans.

Frederick H. Ecker became President of the Metropolitan on March 26, 1929, and associated with him as Vice Presidents were Robert L. Cox and Leroy A. Lincoln. Mr. Cox died in January of the following year, and Mr. Lincoln immediately assumed the position of second in command. He succeeded to the Presidency in March 1936, when Mr. Ecker became Chairman of the Board. When the new administration took office in 1929, the country was enjoying what appeared to be great prosperity.

Many men in business and in public life believed that we had attained a depression less economy. Corporate earnings were at a high level. There was frenzied activity in the stock market and in the flotation of new securities. Prices of common stocks reached dizzy peaks. Credit was easy to obtain. The growth of the Metropolitan and of other life insurance companies reflected the optimistic spirit of the times. All prospered as a result of the great business activity and the high rate of employment at good wages then prevalent throughout the country.

The first hundred billion dollars of life insurance rates in force had been attained; predictions were being confidently made that within another 10 years the second hundred billion would be added. But in October 1929 came the first manifestation of a series of cataclysms which shook the country and the world. The first stock market crash came almost out of a clear sky. The full significance of this indication of economic distress was little understood at the time. Many people suffered immediate losses. Many held on to their securities while prices were dropping sharply, only to sell them at even lower figures at a later date, or to be closed out for lack of margin.

Nevertheless, there were many in high places that refused to believe that this was more than a temporary financial setback. Although the national income fell in 1930 and 1931, it was still at a fairly high level. Because of the low prices to which common stocks had fallen, various recommendations were made in the late autumn of 1929 urging the life insurance companies to make such purchases in anticipation of rapid economic recovery.

The State laws governing life insurance investments specifically forbade such venturing. Undoubtedly great havoc would have been wrought in the financial structures of many companies and great losses suffered by policy holders if such advice could have been taken. The market quotations as they dropped from month to month thoroughly confirmed the prophetic warnings of Mr. Ecker, and justified his insistence that the law limiting the character of the investment portfolio of Life insurance companies should remain essentially unchanged.

The life insurance companies stood firm. Because of the character of their portfolios, they were not seriously affected by the declining values. In some respects, the very nature of the upset at the close of 1929 reacted favorably upon the companies. Many individuals who had lost heavily in the stock market felt called upon to increase their Life insurance in order to make good the losses to the estates which they had hoped to build up for their families.

Thus, in the years immediately following the first stock market crash, ordinary insurance made unparalleled gains and was becoming closer and closer to offering term life insurance without exam. In 1930 the Metropolitan issued, exclusive of business revived or increased, close to $1,400,000,000 of ordinary insurance, the highest annual figure in the history of this department up to that time. But even this figure was exceeded by a considerable margin the following year, when a total of more than $1,460,000,000 was achieved. In fact, 1931 has remained the banner year for the writing of ordinary insurance in the Metropolitan.

Even in the industrial department there was an issue of $1,110,000,000 in 1930, only 8% less than in its peak year of 1929. In 1931 the industrial insurance issued still exceeded $1,000,000,000. In both the ordinary and the industrial departments, the total insurance in force continued to increase without interruption through the year 1931. Apparently, the economic situation up to that time had not yet seriously affected the ability of the American people to purchase or maintain life insurance.

Sarah Martin is a freelance marketing writer based out of San Diego, CA. She specializes in finance, business, and different types of insurance. For a free term life insurance quote, please visit http://www.equote.com/.

Many times, we see others as well as ourselves getting into the debt trap very easily. A deadly debt trap never allows the savings to remain with you. However hard you try to save money, you ultimately spend them on paying huge interests on your accumulated debts. So what all, does it take to save money and lead a care-free life without debts? To crack this puzzle, you need not think hard.

While we can see various reasons trigger one deep down into the word of debts, we can broadly classify these so-called reasons as personal, economic and social. Personal situations may include reasons like loss of job, cut in the pay, accumulation of existing debts, treatment of illness, family crisis and so on. Personal situations are never predictable and so one should always be prepared for any such crisis contingencies, which can cause a major blow to the income. It is always advisable to set aside some portion of your income in a different bank account, so that it can be effectively used during such contingencies.

Coming to the economic triggers, one can get blown away with a sudden loss in business, tumbling sales, bad debts, inflation, economy slowdown etc. Currently, we are indeed witnessing the recession in the economy with the cost of living doubled and the means of income reduced.

While personal and economic reasons may be unpredictable, social triggers definitely are self- sponsored and can be truly avoided by adopting certain means. Don’t you think you will be in a posh car showroom tomorrow, if today you see your junior colleague getting that swanky car to the office? Yes, I am talking about status anxiety. As you put a step ahead each time in your career and status, you always tend to get anxious about maintaining the same. As a result, you do not even hesitate for a single moment and delve deep down in the debt-pool.

When we go out for shopping with our friends, we do tend to splurge more than what we actually should. Many things are purchased just because “My friend also bought it”. And to make things simpler, we always carry the very famous “plastic money” with us. Credit cards had come as a convenience, but now we use it to satiate our status hunger. Although, it may sound a little strange, but it’s always wise to ask yourself a small question “Do I need to buy this?” before you actually swipe your card for the purchase.

And what happens next is the rather unending sequence of debt repayments. If you have bought an exotic product on debt, just check out the interest rate you are paying on the actual or principal amount and then you would come to know the real worth and utility of the product.

You get into debts largely because of two reasons – Improper planning and tendency to spend more. Always remember that debts should be availed ONLY if necessary and ONLY to the extent of what you can repay without much encumbrances. Budgeting, planning and control are three simple, yet magical keys to have a debt free life.

Andy Eaton is £21,040.57 in debt, read his personal blog and discover his step-by-step plan for why and how he is eliminating his debt. His journey to debt free is going to happen quickly for him as he is using a plan. Follow his amazing story at http://www.sick2debt.com

Merchant cash advances help business owner’s open doors for better types of funding opportunities. The business cash advance industry is climbing at a continuous rate. This ever increasing growth is because traditional bank loans are not meeting the demands of small business owners.

Business cash advances are a unique funding method. It’s a purchase of future credit card sales, not a loan, so we have to use specific language consistent with purchase of future credit card sales, like payback rate and discount rate instead of commonly used interest rate on bank loans. Merchant cash advances are a lot like factoring but are based on a sale that hasn’t happened just yet.

A business cash advance lender gives business owners a sum of cash advance up front. In exchange, the business owner agrees to pay back the principal amount plus the fee, by giving the lender a daily percentage of their visa and master card sales until the payback is completed.

The daily payback percentage won’t be higher than 10% of daily gross sales, the daily percentage is based on the monthly credit cards sales volume and the amount of cash advance required. The payback time-frame is structured for a 6-9 months term, but it’s not fixed, and there won’t be any penalties if it takes longer.

Business owners usually must switch the credit card processor because the advance is paid back automatically as a percentage of each batch’s proceeds, but the rates will be the same if not better. Just a small number of merchant cash advance lenders don’t require the merchant to change their credit card processors company. Most time this won’t be a problem at all since the rates will be matched.

Business cash advances differ a lot from the traditional bank funding programs. In essence a merchant cash advance lender purchases a small percentage of future Master Card and Visa sales, and the business owner pays back this as a daily percentage of such sales.

Obtaining cash from the bank can be difficult for most business owners, but particularly retail businesses, restaurants, store franchisees or seasonal businesses. These merchants mostly use credit card processing, making a merchant cash advance program a great funding opportunity for them.

What are some of the benefits?

The money is available much faster than it is with a bank loan. Unsecured merchant cash advances are specially a great option for retail and restaurant merchants, not only because these types of businesses can hardly be funded by the traditional bank, but also because of the immediate liquidity and simple process.

Many merchant cash advance lenders advertise that the money will be available in as fast as 10 days, and unlike a bank loan that have a fixed interest rate, as the amount due and due date are fixed each month, no matter if your sales drop. Instead, with a merchant cash advance the payback comes from future credit card receivables, not straining your business cash flow.
Fast merchant cash advance programs are cash flow friendly, during seasonally slow periods specially.

Traditional bank loans require a fixed set of payments every month, whether the business has made a sale or not. But if you choose a merchant cash advance, payments are calculated as a percentage of credit card sales, and if the sales are growing, the re-payment could be quicker, but if the business owner experiences some interruption or sales drop in the business, the payments will drop with it.

Another great advantage of a merchant cash advance, is that the business owner won’t risk he’s personal assets, because there’s no collateral required.

David Castro often writes articles about Merchant Cash Advance and Small Business Loans for Merchant Resources International – To Learn more Visit Us at http://www.cashprior.com