Merchant Funding: The 411 on No Collateral, No Loan Financing

Merchant funding is ideal for the start-up or expanding business looking to get a foothold in a credit-tight economy. Perhaps the best part is that this form of financing places no restrictions on how you can use the money.

What is Merchant Funding?
According to Merchant Advisors, merchant funding is a cash advance paid to you based on your future credit card sales. Merchant funding businesses examine your past sales and will forward you a percentage of those sales. Keep in mind that this is not a loan. There is no money to be paid back. The money you’re getting is a portion of the money you’ll earn in the future

A Wealth of Benefits
Platinum Funding Group reveals a host of unique benefits that merchant funding offers business looking to secure financing.

• Enjoy Discounts. Both volume and early payment discounts
• Unencumbered Growth. Purchase additional inventory with more working capital
• Financial Growth. Reduce bad debt and improve credit rating
• Stress-free Outsourcing. Accounts receivable management, credit checking and collections
• Immediate Publicity. Increase advertising and marketing efforts
• Improve Offerings. Such as extended credit term
• Remain Solid. Keep fixed assets unencumbered
• Retaining Equity and Ownership. Leave the balance sheet unchanged
• Unrestricted Operations. Meet increased sales demands restrictions of conventional credit

No Collateral is a Good Thing
Vendorseek discusses the benefits of merchant funding as opposed to a traditional loan. In their example, a business owner that puts his or her house up for collateral is in danger of losing it if they’re unable to meet minimum payments on the loan.