As the “Alternative Lending” landscape for a small business loan becomes more and more the mainstay for the millions of small business owners using Term Loans, Merchant Cash Advances, and Bridge Lending on a regular basis, growth in the space is inevitable.
The “Fixed Daily ACH” payback method was originally a way for Merchant Cash Advance companies to offer a quick solution for those businesses that simply didn’t accept credit cards. This was a way to still hedge the inherent risk of funding a business without holding collateral or depending upon a perfect FICO.
The ACH payment is similar to the classic Merchant Cash Advance which is a financial tool that allows a business that does a high volume of sales via credit card to be funded a set amount of money, and be paid back by a set percentage held back of credit card sales. This program still thrives especially in businesses like Restaurants, Bars, Retail, Convenience, anywhere you imagine people prefer to swipe. If the set hold back is 22% for example, and the business “batches out” at the end of the night credit card sales of $100.00 quite simply $22.00 goes towards the repayment, while the remaining $78.00 goes to the business account. Let’s say that same business batches $0.00 credit card sales for the day, what happens then? Nothing. There is no penalty for this behavior as long as it is a legitimate part of the business.
As traditional banks continue to decline the vast majority of commercial credit inquiries, where does this leave the businesses that need working capital to operate and grow but they don’t accept credit cards as form of payment? I don’t just mean the cash-only corner-bar, what about those involved in construction services? Skilled labor? Realty? Trucking? These businesses would be excluded from any working capital option, unless they could qualify for a traditional bank loan. As the vast majority of commercial credit applicants are declined – the Fixed ACH option fills that void. Underwriting bases their approval amounts for payment, similarly to the way they would price a credit card deal. For example, they would take total monthly sales, divide that by the working days of the month (average 21) – That would give them the average daily sales. Similarly to the credit card deal they will take that average daily sale number and take 22% of that as the acceptable payment amount if the approval parameters would mirror the example in the previous example found one paragraph above. That payment is manually taken out, Monday through Friday, except on bank holidays, and never on weekends.
The two examples of Merchant Cash Advances I’ve used here on the subject of Small Business Funding are the most common, and easiest to get approval on. Skytop Business Loans offers programs for qualifying businesses that will operate similarly however may offer more favorable payback terms such as a Weekly debit as opposed to Daily, and even monthly paybacks which would be the most difficult approval, but still far easier than the traditional bank. All programs we offer have features that make them attractive for a multi-step plan to help business owners grow their business. We have a very popular plan for Small Business Loans that start out with an Easier Approval Advance, with an early prepay discount, that we simply refinance out of as credit, and cash flow improve. This allows us to save our clients thousands of dollars over the lifetime of their relationship with us.
Recently a long-term client of ours, worked with his dedicated capital consultant to secure a fixed daily ACH advance, when he was funded the $20,000.00 there was a set plan put in place for where every dollar would go, as we never advise borrowing more than you truly need as doing so is paying unneeded premium on the funds. Step one, was we enrolled him into our debt repair service, Step 2 came when we used the designated funds to obtain the equipment he needed to grow his business and earning capacity, Step 3 was to not miss a payment. That’s all. When the business owner had paid back about $10,000 his credit score had gone up considerably, and his revenues were stronger as with the additional equipment he was capable of performing more time efficient work and take on more projects. Those two things combined allowed us to get him a new deal with a longer term, lower rate, and buy out the existing balance.
The point of the multi-step program when it comes to our relationships here at Skytop Business Loans is that we simply don’t want to be a one stop shop – we offer a full suite of services from the advances spoken of here, to true SBA Loans which are backed by the government. We value your time and understand you might be interested but still have questions. I’d advise you check out our website at www.skytopbusinessloans.com and submit your information, e-mail our general mailbox at firstname.lastname@example.org or even simply pick up the phone! 844-323-LOAN we’re looking forward to speaking with you, if you are ready to GROW YOUR BUISNESS!