A merchant cash advance is an alternative lending program that is not paid back in monthly installments. Rather, companies that receive MCA loans pay it via a percentage of their credit card sales. This type of loan is good for companies that accept credit card businesses. The rate of how quickly the MCA can be paid off is directly related to the volume of sales — the higher the volume, the quicker the loan can be repaid in this instance.
Asset-based lines of credit are another form of non-traditional Commercial Loans. In this case, a lender can offer a line of credit based on the value or equipment or hard assets the company owns. This is ideal for companies that utilize equipment such as restaurants, beauty salons, and companies that manufacture goods. Much like the MCA loan, the amount of the asset-based line of credit and access to working capital is higher based on the value of the equipment.
A third alternative option is an unsecured line of credit. In the case of a new business or one that doesn’t have any equipment or a brick-and-mortar to use as collateral, an unsecured line of credit may be a good option. This gives businesses working capital; however, because the lender assumes this high-risk investment, often this comes at the expense of a much higher interest rate and payment terms.
Why would a company benefit from seeking alternative Commercial Loans?
Non-traditional loans like this can benefit a company that is looking to get a loan fast. Oftentimes, these loans can be approved quickly and don’t have to go through all the red tape of the traditional bank loan applications.
New businesses that haven’t established a line or credit or a strong credit history, businesses that don’t have much to offer in terms of collateral or who have a specific niche business that traditional banks won’t take the risk on could all benefit from seeking this type of loan program. Do you research online and seek the counsel of a lending professional who can walk you through the benefits — and the risks — of these non-conventional lending options.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.