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Defference Between a Small Business Loan and A Merchant Cash Advance

Business Loans

A business loan goes through an underwriting process that can take a few weeks before you are notified if you are approved or denied. Depending on the loan size, the funding bank will need certain documentation such as personal tax returns, business returns and financial statements. The underwriting process will determine if the business or business owner has a good credit history and the ability to pay back the loan which will involve a personal guarantee from the business owner. Usually there will be a stipulation that the business can’t open up any new debt during the term of the loan.

Repayment Terms

A business loan will usually have a maturity or payoff deadline of 3 to 10 years and the interest rates are usually fixed. The payments however can be amortized over a longer period of time making the payments more affordable. In this case, the loan will have a balloon payment due at maturity so the business owner will want to make sure they have a plan to payoff this balance at maturity or they may have to request a renewal or extension.


Depending on the loan size, the bank may require collateral which can be in the form of property or assets. This can include real estate if they own the property, business assets and in some cases accounts receivables.

There are express type loans with loan amounts up to $50,000. These are usually based on the owners credit and personal guarantee and do not require collateral. Since it is unsecured, rates are usually higher and can come in the form of a revolving line of credit or a fixed term loan. The processing of these types of loans can be done usually within three to five days.

Merchant Cash Advances

A merchant cash advance can be processed much quicker and may be more convenient depending on the need for the funds. Since these types of loans are based on credit card volume, the business owner must have a merchant account for credit card transactions. Usually an approval can be done within 24 hours and since the documentation is limited, can fund within 72 hours. In some cases a business owner will use a merchant cash advance as a bridge loan while they are in the process of a business loan application.

Repayment Terms

A merchant cash advance is a short term solution for funds needed for business purposes such as inventory, expansion, upgrades or temporary cash flow. The repayment terms are based on a factor rate depending on the term of the loan. This loan will also have a balloon payment so the business owner will want to have a plan to payoff the note or will have to renew the loan.


These types of loans base their approval on the monthly volume the business owner does in monthly credit card transaction. The collateral is basically the business owner agreeing to use future credit card sales for the repayment of the loan. Documentation is limited so this type of financing can fund quicker than a traditional business loan. Typically there is no personal guarantee and will not effect the business owners personal credit.

Why Are Business Websites Important

Whether you’re just starting out as a business owner or have been in business for a while, having a website is important. Your current and future clients come to expect it from the business they patronize, so if you don’t have a company website, you may be missing a lot of sales.

The number of businesses that are on the Web has increased dramatically and you can be sure that your competitors’ websites are online too. So, why allow your competitor to beat you to a sale just because your business doesn’t have a website. Websites are not just for large businesses. They are a must-have for small and mid-sized businesses too.

Millions of people surf the Internet daily, searching to find solutions to their every day needs. Some surf the web to make online purchases because it saves them time, energy, and money. Surfers visit websites to learn more about a business, and they can do so from any location and at any time. Your virtual store is open 24 hours a day, 7 days a week even when your office is closed. Think of your website as a great customer service representative, sales representative, and marketing agent. It won’t get tired or go on vacation even when you do. So, you can rest assured your website continues to work for you.

As a customer service representative, your website answers questions about your company’s hours and location, what products and services you offer, and any minor details people would usually call your office to get. This will reduce tons of phone calls to your office and allow you and your staff to focus on other aspects of your business. Your website should be designed to reflect the professional image you want to convey. It should be easy to navigate, so surfers can. Good design is not only the ability to make a site pretty, it also has to provide a user interface that people of many different ages and levels of computer literacy find intuitive.

As a sales representative, a business website can increase your sales and decrease your costs. The number of online shoppers increases yearly. Online shoppers sometimes shop on a whim, so it’s important to have your website available for them when they are ready to make a purchase. Adding a shopping cart to your website will allow buyers to make purchases directly from your website after-hours or just for convenience. If you are selling digital goods, you can set your website to automatically deliver the item that the customer just purchased directly to their email box.

As a marketing agent, your website allows you to reach out to people not just in your local community, but throughout the world. Your website will save you tons of money you would have otherwise spent on postage, paper, or advertisement. Many businesses include a contact or feedback form on their website which helps them generate leads. Visitors to their site can be included in subscriptions or advertisements that are emailed about new company products and services.

Additionally, if you need to communicate news or information to vendors, clients, or the general public, you can add the content to your website right away and post it online for all to see. You can easily direct friends, family, and future clients to your website by simply adding your website address to your business cards. A website is a great tool that promotes your company and enhances word-of-mouth. So, why is a website important for your business? Because it’s exactly what your business needs to thrive in this day in age.

Your business needs it and your customers expect it. For more information on how we build business websites contact us by email or just give us a call at 888-569-5501.

Marden Web Design

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