Main Street Finance Group offers a variety of funding options for small businesses and is always in the process of adding more programs that benefit our clients. In most cases any business that has been operating for more than 6 months and has a monthly revenue greater than $5,000 will likely qualify for some type of funding. Other factors include business owners’ credit score, average business bank account balance, and whether or not the business has any existing cash advance loans, liens, or defaults.
Merchant Cash Advances (MCA) have become the most popular method for small business funding in post-recession America. The process works like this: once funding is approved, the funds are deposited in the business bank account, and it will be paid back using a percentage of the businesses’ future revenues directly out of the same account. Depending on eligibility this will be done either daily or weekly. Typical MCA loans may be in the area of $5,000-$100,000, paid back over 2 months to a year or more. In the case of large advances the payback length may be 18 months or more.
Lines of Credit are somewhat similar to MCA’s, except that the merchant has the ability to choose when and how much funding they take out of the amount they are approved for. Interest rates for LOC’s tend to be a little bit lower as well. Otherwise, the qualification process for Lines of Credit and MCA’s are the same.
Business cash advances and lines of credit are examples of non-asset backed loans that are supported by the company’s future credit card receivables. Collateral loans are somewhat similar to traditional bank loans in that they require the borrower to use the value of real estate property or large business equipment (such as company vehicles or large factory machinery) to underwrite the loan. These loans are also similar to traditional loans in that they can also take several weeks to complete and have a lot of paperwork requirements, unlike a business cash advance. However, a business with a valuable piece of collateral can often be approved for a far greater loan than they may ordinarily qualify for based purely on their monthly revenue and credit score.
This type of loan is specifically for buying machinery necessary to expanding a small business operation. Requirements may vary but the terms are often fairly similar to other small business loans.
Not every business is looking to add another loan to businesses’ bottom line; in some cases it is far, far more valuable for the company’s sustainable future operations to consolidate their existing loans. While consolidating large amounts of business advances (greater than $50,000) is often difficult for small business lenders, there are often situations where we can offer businesses with 1, 2, or 3 existing loans can a consolidating loan that will pay off the existing debt and leave the company with some funds for their continued needs.
Healthcare cash advances are different from business cash advances in one important way – they can create advances based on future insurance receivables as well as regular business revenue. This means that future Medicare, Medicaid, & all commercial healthcare claims & receivables can used as revenue to underwrite an advance offer. These types of deals are available to almost any healthcare industry business that handles revenue from healthcare insurance companies.
The upshoot of the healthcare cash advance is that it creates much better loan options for business in the medical industry than qualifying simply through credit card receipts. Merchants are not required to change credit card processors or insurance providers to get funding. However, unlike a business cash advance, businesses are required to use the funds for certain purposes, such as:
- Practice Acquisition / Practice Expansion
- Purchase Bulk Supplies
- Hire and Train Staff / Bridge Credentialing Period
- Advertising / Marketing
- Upgrade Technology
- Pay-off Vendor Bills