Merchant Financing 101: What You Need to Know | NBC


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Merchant Financing 101: What You Need to Know

If your business is in the B2C retail space and most (or possibly all) of your transactions are conducted via credit card or debit card, then merchant financing might be the flexible funding solution you need to cover expenses, make investments, and keep your business on-track for future growth.
Since there are some misunderstandings and myths surrounding merchant financing — often propagated by banks that don’t offer this solution — here are some key facts that you need to know:

merchant cash advance 101 information you need to know

You can use merchant financing for any purpose.

Most bank loans come with strings attached — including one that obligates you to use the funding for a specific purpose, such as buying inventory, upgrading a facility, and so on. If you deviate from the plan, then you could be in breach of contract and your loan could be called in.
However, with merchant financing there are no spending rules or restrictions. You can use the cash to cover temporary shortfalls, purchase equipment, pay for advertising campaigns, implement new technology — and the list goes on.

Your total cost of borrowing won’t go up if you take longer to repay the financing.

Merchant financing is technically an advance on future credit and debit card sales vs. a conventional business loan. At the end of each business day, a small portion of your daily sales is calculated (e.g. 2.5 percent), and that amount is automatically withdrawn and applied against the advance.
One of the key advantages of this approach — and a factor that makes merchant financing distinct from other kinds of business funding — is that you won’t pay a higher total cost of borrowing if it takes you longer than anticipated to repay the advance. Your total cost remains fixed and known from day one, which gives you more control, predictability and stability.

You don’t have to pledge business and/or personal assets to secure merchant financing.

Unlike a conventional bank loan, some lenders — including National Business Capital — offer unsecured merchant financing. This means you don’t have to pledge business and/or personal assets as collateral, nor do you have to endure a prolonged collateral valuation process that often takes weeks; or sometimes months.

You can combine merchant financing with other business funding solutions.

If it’s beneficial to do so, you can combine merchant financing with other business funding solutions. For example, many of our merchant financing customers also obtain a revolving business line of credit to cover unexpected, short-term expenses. And since interest is only charged on the amount borrowed, having this option as a contingency makes strategic sense.

Want to Learn More or Apply for an MCA?

To learn more about merchant financing, contact National Business Capital today or fill out our two-minute application! At National, we know merchant financing is a great way to get funding for your future credit or debit card sales in order to take advantage of a time-sensitive opportunity.
If you’re ready to identify these opportunities and learn how business funding can grow your business, download our FREE eBook “7 Profitable Opportunities That You Could Miss Without More Business Fundingtoday:
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    Last Updated on January 16, 2018

    National Business Capital helps entrepreneurs secure quick and fair financing to save time and cultivate sustainable growth.

    Our stress-free online platform is designed for simplicity and speed, helping business owners go from application to approval in a matter of hours. And while we remain a leader in the Fintech industry, our clients agree it’s our personalized service and award-winning team that sets us apart.

    From SBA loans to lines of credit, to equipment financing, and more, business owners can access all the different financing programs available to them in one place. Through our streamlined process, we have helped clients secure $2 billion in financing since 2007, and, more importantly, we’ve helped entrepreneurs save a tremendous amount of time and grow faster.

    About the Author, Joe Camberato

    Joseph Camberato, CEO of National Business Capital, developed a passion for business at a young age. Joe started his company in 2007 in his spare bedroom and has grown to secure over $1 Billion dollars in financing for small business owners nationwide. National’s team has an amazing culture and has been name the #1 Top Workplace on Long Island 3 years in a row and counting. Joe is a trusted financial expert who’s published more than 2,000 articles in the last 3 years. His articles have generated over 5 million page views and has been featured on blogs such as Google News, Yahoo, CNBC, Forbes Magazine, etc. His passion has also inspired him to build the "GrowByJoe” YouTube channel where he shares his insights into small business trends and tips for growth. Joe also holds a seat on Forbes Finance Council and is an active member of the Young Presidents' Organization (YPO), a global leadership community.

    Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from National Business Capital and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.