How to Get Rid of a Short-Term Business Loan?

For every business owner, getting a loan for their small business it is a major hurdle due to the strict lending standards by banks and private loan providers. The personal loan market has exploded in recent years. There are now more sources that offer fast short-term loans. Short-term business loans can provide any business with a cash flow boost. Taking out a short-term loan is essential when you need to pay off card debt, manage office renovations, start or expand your business, and for other working capital needs.

Alternative lenders offer different programs including term loans, lines of credit and accounts receivable financing. After comparing, select the one with the lowest APR (annual percentage rate). There are different types of lenders available in the market which provide loans, but nowadays online loan providers are the most accessible platform to get a short-term loan fast.

Getting rid of the short-term loan

Getting rid of any loan can become difficult if you hit the phase of a bad financial situation. It is very important to make a loan paying off strategy before you even get the loan. Here in this article, we are going to discuss some of these strategies through which you can get rid of Short-term business loans easily.

1.    Mid-Term Business Loan

Medium-term loans are business loans offered by banks and alternative lenders. They typically have fixed interest rates and flexible payback terms that the last one to five years. Depending on the loan, you typically have the option to repay in monthly or bi-monthly installments with no penalty for prepaying.  While collateral generally isn’t required, lenders may request a personal guarantee to secure the loan.

2.    Secured Business Loan

Commonly referred to as asset-based loans (ABL), asset-based finance is a form of business lending that relies on the collateral of your business, rather than just cashflow and credit. Conventional loans look at cashflow first, collateral second, while asset-based loan programs look at collateral first and cashflow second.

Relying on the collateral to provide financing allows businesses that are growing rapidly to maintain the liquidity needed to keep up with capital requirements. While ABL is great for high growth companies, it’s also great for companies that have stable growth or are in distress and need to recapitalize their balance sheet. In most cases shifting existing term debt into a formulaic asset-based line of credit will result in improved cash flow and more liquidity for the business.

3.   Reverse Consolidation

A reverse consolidation leaves the multiple merchants cash advances in place, but the reverse consolidation company takes care of the cost of the daily payments. In return, the small business pays the reverse consolidation company a fraction of what they had been paying – but for a longer-term than they had with the original advances.

If you are one of many business owners stuck in a merchant cash advance and want to discuss strategies on how to refinance the dept reach out to BitX Funding as they have many products to help you out of your situation.

BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.

You can reach loans specialist by toll-free at 1-800-824-2407, or email at info@bitxfunding.com or applying online here and we can guide you on which loans are the best fit for your business.

2 Simple Ways to Paying Off Merchant Cash Advances

A merchant cash advance (MCA) can be a timesaver while looking for proper financing for your small business. It is a convenient option to grow your business and sustain cash flows temporarily. In spite of acting as a conventional type of loan, which requires a long and hectic method of application submission and credit score checks, besides usually complicated and perplexing reparation terms, Merchant Cash Advances or MCAs tend to be short-termed and keep businesses sailing in the case of any original damage they may have to face.

Merchant cash advances are especially beneficial funding the alternative for small and medium businesses that manage a considerable percentage of their sales through credit and debit cards. For example, if you’re looking for a funding opportunity for a restaurant business, merchant advance funding (MCA) would be worth recognizing as a possible funding method when going through a bumpy fiscal point.

Value of Merchant Cash advance in Business startup

If your small business has only been around for a short period, has a weak credit score, or if you do not have any marketable assets to be used as collateral to the loan - MCA can still work for you. The Merchant Cash Advance method is rather straightforward; the financier or the funding firm will provide a small business with a substantial amount as a whole, which can then be repaid through the lender receiving a cut of the debit or credit card transactions in the future. 

The sum lent and reimbursed fluctuates significantly depending on the scope, capacity, incomes, and revenue generated of your small business. Still, MCAs are commonly seen as an efficient and accessible means to spout short-term cash flow concerns. The industry is considerably large and ever-growing. Therefore, it is essential to approach an MCA funding party equipped with the appropriate information and awareness.

Working of MCA

Merchant cash advance providers will evaluate your bank statements over the preceding three (3) to six (6) months to determine how much advance is fitting to be provided to you. Usually, an advance can reach from 50% up to 250% of your business’s credit or debit card activities.  But the advance is never enough to support your true need, so business owners find themselves taking out multiple advances to hit their goal. This method of stacking MCA’s is dangerous to your cash flow and profitability. If you are stuck in the hamster wheel of MCA advances her are two ways to pay them off before your financials collapse and you are stuck.

Ways to pay Off Merchant advance

There are many ways to pay off merchant advance but here are two most simple and effective ways.

1.    Personal Loans for Business:

Many new small-business owners access financing through personal loans, often via a growing number of online lenders. But like credit cards, personal loans can have high APRs, especially for bad credit borrowers.

Personal business loans can be a good option for borrowers with excellent personal credit and strong income.

Nilssen says small-business owners should consider personal loans “an option of last resort.”

“Where they can work,” he says, “is when a business just needs a small amount of money for things like … paying off a merchant cash advance.”

BitX Funding is a great resource for Personal Loans for Business check out their website for more information.

2.    0% Business Credit Cards

Many small-business owners use credit cards for funding. If your credit isn’t damaged by the merchant cash advance, you might be limited to secured credit cards, which typically have higher fees than regular credit cards.

It’s important to remember, however, that credit cards are a great way of refinancing a merchant cash advance, particularly if your cash flow and profits have been hurt by the advance. That’s because card issuers determine your approval based largely on your personal credit scores, not the business financial health. And research has shown that small businesses that rely heavily on merchant cash advances tend to fail.

BitX Funding offers 0% business credit cards for 12 to 18 months plenty of time for the business to reorganize its financial situation and shift the debt from a daily payback to a revolving debt that only requires a minimum monthly payment at no interest.

BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.

You can reach loans specialist by toll-free at 1-800-824-2407, or email at info@bitxfunding.com or applying online here and we can guide you on which loans are the best fit for your business.