Franchise Financing: The Business Cash Advance
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Franchise Financing: The Business Cash Advance
Data collected from businesses started in 1992 shows that about 36 of new startup businesses fail within the first two years.nbsp; Because of such frightening numbers many potential business owners choose to buy franchises considering it a less risky venture because the name and brand have already been established.
Still just like any other business endeavor running a franchise takes financing.nbsp; And even after purchasing the location buying inventory and paying franchise fees a franchisee still needs cash to pay for daily operating costs and to maintain the business.
At this point many franchisees turn to banks for financial support.nbsp; But recent news hints that franchisees could benefit by making the switch from the bank loan to the business cash advance.
The Facts
A list of loans at 500 franchises shows the number of defaults by franchisees increased 52 in the fiscal year ended Sept. 30 2008 from fiscal 2007 writes Richard Gibson in the Wall Street Journal.nbsp; Loan losses totaled 93.3 million a 167 jump from 35 million just 12 months earlier.
There are various reasons why a franchisee might default on a loan.nbsp; The fixed monthly payments may be too high the franchisee may forget to make payments and face overwhelming fees or the franchisee may experience a stream of significantly slower months.nbsp; Choosing a business cash advance instead allows franchisees to be less concerned with these problems.nbsp;
The flexible repayment plan that comes along with the business cash advance makes repaying business funds simpler.nbsp; Franchisees never have to worry about remembering to make payments or fear payments becoming too high.nbsp; This is because business cash advance payments are made at neither a fixed rate nor a fixed time.nbsp; In fact business cash advance payments are only made when customers make Visa or MasterCard purchases.nbsp; When customers pay with these credit cards a small percentage of the sale is automatically deducted and applied to the franchisee’s business cash advance repayment.nbsp; With the activation of this process payment amounts go up and down according to the business’s sales making it virtually impossible for payments to become too high for the business to support.
Owners of over 20 wellknown franchises have already taken advantage of the business cash advance.nbsp; They have been able to secure up to 500000 in as little as ten business days just by proving that they have owned their businesses for at least six months providing documentation showing that their franchises process a minimum of 5000 in monthly credit card sales and meeting a few other minimal requirements.
Do not take a chance with your business.nbsp; Find out if the business cash advance is the right choice for your franchise.
About the writer: Chrystal King writes articles about business cash advances the alternative method of business funding for Merchant Resources International. Visit http://www.1stbusinesscashadvance.com to receive cash for your business today.
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