Growing your business and getting a financial foothold altogether can be tricky if you’re just starting out. Every firm and entrepreneur is going to need capital to some extent if they have any hope of going the distance – but you don’t have to scramble around for loose change or take out hefty loans to get moving.
Here at PDQ Funding, we have been voted the UK’s leading Merchant Cash Advance provider for 2018. Our business helps to support small and growing businesses across our region with a wide range of choices for funding. Today, we’re going to look at the difference between business credit cards and merchant cash advances to see which route may be most practical and beneficial for you.
Business Credit Cards
The huge benefit to business credit cards right away lies in the fact that they’re very easy to understand. They work in the same way a personal credit card would, only you’re using them for professional purposes. These cards are great for helping you to build your credit score and you won’t have to necessarily make big payments on a regular basis if you are experiencing a slowdown in cash flow. There’s also a matter of there being additional perks and rewards should you make large purchases here and there – essentially, you get plenty in the way of discounts.
However, credit cards do offer drawbacks, and these largely revolve around how you manage your money. You will likely face high penalties if you miss making any payments – and it’s safe to say that repayment altogether is less flexible through this route than with other funding options available. Failure to pay can affect your credit rating adversely, and if you need cash advances, you can be expected to pay out with large APR demands behind you.
Merchant Cash Advances
A merchant cash advance is a lump sum which can be offered to growing businesses in need of a funding injection at short notice. These PDQ cash advances are offered on the provision that you offer the funder a cut of your sales on a regular basis for some time to com. This is dependent on entirely upon how much you wish to borrow and your current cash flow situation. The benefits of this form of unsecured funding are clear – there are no interest rates, it’s extremely easy to start an application and to receive funding – and what’s more, you won’t have to worry about your credit score.
However, it may not be the best option for all – you will largely need to repay through sales on a daily basis, and it may work out more expensive in the long run as opposed to a basic loan.
What’s Right for Me?
All sectors of business have different funding criteria. The starting point for a cash advance should be the use of a card payment terminal. Sectors such as hospitality, gyms, or MOT garages are perfect for this finance product as their card spread will be great.
There are pros and cons to all types of commercial funding – and PDQ Funding is here to support you in your search for financial assistance no matter where you may be on your business journey. Merchant cash advances, loans or cards – Get in touch through our contact form today and let us help.