Congratulations on running your own business. We know from experience that running a small business is expensive – there’s payroll, inventory, marketing, licensing and more. Without consistent cash flow, these expenses quickly add up and before you know it, your business may be in trouble. That’s where we come in.
We help smooth out cash flow dips and cover unexpected expenses with our merchant cash advance.
A merchant cash advance goes by many other names. Merchant advance. Business advance. Cheque advance. Pre-purchased receivables. You need quick cash, and merchant advance companies like us, provide it to you. The program offered and the benefits of working with True North Capital are different from traditional funding options. Here are the key differences:
We’re not a business loan.
With a Canadian business loan, a bank will provide you with cash that needs to be repaid within a fixed time frame. A business loan is typically secured against the asset being financed. What this means is that if you are unable to repay the loan, the bank can seize the asset as payment. The banks have a strong focus on minimizing risk of non-payment; therefore have a substantial list of criteria that need to be met in order to secure funds. The process of trying to get a business loan may involve the submission of a business plan, sales forecasts, personal credit checks and lengthy application forms, guarantors and collateral.
We’re not a business line of credit/business credit card.
A Canadian business line of credit (operating loan) and a business credit card offer you a certain amount of credit to cover your day-to-day expenses and short term purchasing needs. It’s similar to a business loan, but it’s for much smaller expenses. Both are a little easier to secure than a business loan, but may be a more expensive way of getting funds, since the interest rates charged tend to be higher. Approval for credit also involves an application form, personal credit checks and may include a guarantor or co-applicant.
The big 5 banks, Royal Bank, CIBC, TD Bank, Bank of Montreal and Scotiabank are the primary providers of business loans, a business line of credit or a business credit card in Canada. The major benefit is that you can buy what you need upfront from the vendor, and repay the bank afterwards based on their specified repayment schedule. While these are all great funding options, it may be a little more difficult to get bank approval due to strict lending guidelines designed to minimize risk for the banks – and even tougher in a downturned economy.
Your funding alternative is a merchant cash advance.
The biggest differences between a Canadian merchant cash advance and the options listed above stem from the repayment and approval business model. The result is a higher chance of getting money, and getting it quickly.
Repaying The Funds Received.
The repayment model is the driver behind a merchant cash advance. The repayment is simply a percentage of your debit and credit card revenue. It’s not calculated off your payoff term or outstanding balance. If you have trouble projecting revenues, then you may have trouble projecting your repayment expense, but you’ll always have the bulk of your cash flow available for other business needs. You don’t have to worry in a slow month that the repayment is eating up all your incoming revenue – a major benefit if you have a seasonal business.
Getting Approved for Funding.
Approval is based is on current and projected credit and debit card sales volumes, not on your personal credit history. There is no collateral needed to secure the funds. There is no need to present a business plan. What you do need a few months of credit and credit card transaction statements – luckily you get these on a regular basis from your payment processor, so no major work is required on your part. Since less information is needed, the applications to fill in are much shorter and approval turnaround happens very quickly. A quick turnaround is essential when you’re looking to make an investment that will help bring in more business in a competitive environment.
Throughout the lifecycle of your business, you’re sure to use a combination of business loans, lines of credit, credit cards and merchant cash advances, but it is reassuring to know that even in hard times that you still have options that can help you to keep your business running.
