Choosing an advance provider that fits your needs can make all the difference in a business cash advance transaction. With cash advances especially, it helps to take a bit of time to evaluate providers, rates, and terms. If your business needs cash fast, you might be inclined to accept the first offer that comes your way. Resist the urge to make a quick choice—making the right choice will benefit your business in the long run.
You might be able to get a merchant advance from a vendor you already work with. Banks, merchant account providers, credit card processing companies, and credit card issuers are offer cash advance services with different terms and qualification procedures. Choosing a company you are already comfortable with can make the process easier. The size of the company doesn’t really matter—large banks and small processors can be equally reputable.
Choose a provider that can guide you through the application process, and that you are comfortable working with as the advance is repaid. The provider will have access to your and customers’ credit information. Make sure you choose a trustworthy provider.
Here are some other important qualities to consider:
You should also know about some standard industry practices before you choose a vendor. Vendors do not usually charge administration or application fees. A vendor asking for customer credit information or for your account information directly before you are approved is probably not a good choice. Providers should not require that you use their services, such as merchant account processing, as a condition of awarding an advance.
Make sure you get references from past customers, especially with factoring transactions. Ask about their experience. A simple Internet search on a company can also yield valuable information. Where is the company headquartered? American companies will be subject to U.S. regulations and are often a safer choice than offshore companies.
- Customer Service
Since you will stay in contact with the provider throughout the repayment process, it’s important to make sure they provide good customer service and that they are responsive to your needs. This is especially important in factoring transactions.
A reputable provider will not approve customers for advances they will have trouble repaying. If a provider tries to “sell” you on a more expensive transaction, or one that will strain your business to repay, keep looking. Just because you are approved for an advance doesn’t mean you have the actual ability to repay it.