Merchant Loans

Three Top Tips for Merchant Loans

In today's financial climate, it's not always easy for a small or medium Port Washington NY business to get loans from the bank. Luckily, small businesses have other options to get cash when they need it. If you're a small business owner, one of your best options for ready cash when you need it is merchant loans. The most common merchant loans are cash advances on credit card transactions, though there are other types of merchant loans as well. Whatever type of merchant loans you're considering, however, you should ask yourself these questions before you request funds.

What Do You Really Need?

Merchant loans can be vital in an emergency situation. You can get money quickly and often with fewer restrictions and requirements than a bank would demand. On the other hand, like most non-traditional loans, the interest and fees on merchant loans can be higher than those on traditional loans from a bank. Remember that any Port Washington NY lender will get a chunk of your future profits as repayment, so be sure to only take out loans for things your business actually needs.

What Is the Repayment Plan?

Merchant loans are far easier to qualify for than standard loans, in part because the lenders don't go through the same exhaustive process to verify that you have enough income to pay back the loan while still having the money you need to run your business. That means it's up to you to make sure that your business can live with the repayment plan. In general, merchant loans call for you to make repayments through your credit card sales. Before you sign a contract for any merchant loans, be sure that you can feasibly make the payments without straining your business.

What's In the Contract?

Before you sign anything concerning merchant loans, read every word of both the contract and the service agreement. It's vital that you read and understand all the details of the payment plan, the charges and terms.

Merchant loans are a great way for small businesses in New York to get through a sticky situation, but be sure you check the details and understand the contract before putting your John Hancock on it.