(EMAILWIRE.COM, February 02, 2016 ) Biz4loans Merchant Cash Advance -- Factoring accounts receivable is perfect for a business that is experiencing or has growth opportunities, is less than 3 years old, or is in an industry that is difficult for traditional lenders to get their hands around (e.g. technology staffing). Factoring will provide the working capital in real time, which will allow a business to hire additional
The "process" is pretty simple: When new invoices are created, they are presented to the factor for funding. The factor advances cash against the invoice -- generally 85 percent of the face amount -- and when the invoice is repaid, the factor retains a small percentage as their interest payment. A factor will require that the customer payments are sent to a "lock box" at a bank to ensure repayment goes directly to them. MCA loan Biz4Loans
For a small business that is growing rapidly, access to Merchant Cash Advance within a day or two versus waiting to be paid by the customer 35 days later is critical. Also, factoring is not considered to be a line of credit or a loan; it is a purchase of the receivable by the factor and the cash goes to the asset side of the balance sheet. With factoring, a business has the added benefit of receivables management, collections, credit advice on new and existing customers, and, in some instances, a credit guarantee is available. All of this helps to keep a business safe as it grows.
An MCA is a loan, and the lender uses the business' monthly sales volume to determine the loan amount. The typical borrower is a business that does not generate invoices, but rather, collects cash, checks or credit cards for its products or services (e.g. restaurants, hair salons and various retail establishments). As such, the lender's risk for repayment is greater than a factoring facility and the interest rates are considerably higher. The MCA lender will debit a business' bank account on a daily basis to ensure repayment of the loan. Some MCA lenders will even debit a company's credit card merchant account as a means of repayment.
An MCA loan is most effective when the business needs to purchase a new piece of equipment and/or new product inventory to facilitate increased sales. An MCA loan is not a band-aid for paying suppliers when a credit line limit has been reached and/or when making tax or other loan payments. As a one-time loan with daily repayment requirements, a borrower needs to make sure that they have the necessary profit margin to support the payments and still have operating capital. It can be a valuable tool, but it needs to be carefully managed by the borrower so that it doesn't stifle a business in the long run.
About Biz4Loans Merchant Cash Advance
Biz4Loans is a California-based company with an exciting new way of quickly closing commercial loans for businesses small and large. With a customer-centric focus and a high standard for quality service, we embrace new technology to pass cost savings on to our business clients. Entrepreneurship Advocates "Entrepreneurship is living a few years of our life like most people won't, so that we can spend the rest of our life like most people can't. " -Anonymous We believe entrepreneurship to be one of the most rewarding journeys that a person can pursue and that no two entrepreneurs are the same. Some seek a better life for themselves and their families while others take on the risk in pursuit of independence. Whether it is a small town where everyone knows each other or a big city that never sleeps, every community relies on entrepreneurs to create and provide jobs and to usher in new possibilities. At Biz4Loans, we understand the challenges that entrepreneurs face in financing their venture. We also understand that a startup entrepreneur frequently has to wear many different hats while her company is getting off the ground. This is why we provide a quick, convenient, and detail-oriented process that achieves results without unnecessary delays or obstacles.
Growing the Business Community commercial loan brokers. Whether it is financing to cover initial start up costs, purchasing of new equipment for an existing business or an expansion of facilities, Biz4Loans can help. We know that sometimes unexpected costs as well as unexpected opportunities require quick and decisive action. Our ability to quickly close a wide variety of loans has allowed us to build strong relationships based on our reputation for serving our clients effectively. Because of our speed and adaptability, Biz4Loans has brokered over $500 million in funding to businesses ranging from farms, hotels, and non-profits to office buildings, surgical centers and apartment complexes.
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