For SMEs, let me discuss some guidelines and tips for your effective financial management.

I have several friends who already quit their professional careers and gone through putting their own small business. Most of their small businesses require additional working capital to expand their operations and most of them go through loan applications. But finding the best lender that gives the most reasonable terms can be hard and oftentimes strict requirements and a good credit standing is a major factor for loans approval. This is a common difficulty. It is often a standard operating procedure from these lenders to ask for collaterals, a good credit status and even a third-party guarantor in order to qualify for a loan. Non-compliance often resulted to denial of loans. With merchant cash advance or business cash advance, working capital to small and medium-sized entrepreneurs is now a simple and an easy thing to get it done.

Working capital, refers to a business organization's total current assets (short-term ones), marketable securities, accounts receivables, inventory and cash. Access to capital is important for businesses to advance to the next level or to sustain through a rough time. Traditionally, when a business needed additional cash, a trip to the bank for a business loan would solve the problem. But a traditional bank or financial institutions such as in business loan would require a minimum credit score for the business owners, tax returns, financial statements and takes weeks or even longer to secure . With the state of today's economy, businesses are looking for alternatives to the traditional business lending of the past.

A merchant or business cash advance is a very good alternative. A cash advance pays a business for its future credit card sales up front (before those sales are actually made). The amount of the advance is determined by the merchant's average monthly credit card sales. As future credit card sales occur, the cash advance is paid back with a small fixed percentage of the daily credit card sales. The merchant is charged a fee for the advance and that fee is included in the payback amount.

Cash advances are a safe and reliable means to acquiring capital for your business. But when acquiring additional capital, an entrepreneur must be sure to secure plan of action for the funds, to use the money wisely and let it help you advance your business to the next level. Business cash advance is a great way for small business owners get the funding they need, with a fast and simple process, merchants can be funded with up to $500,000.00 in as little as 10 days. 

How merchant cash advance works?

A lender will purchase a small percentage of your future credit card sales, until the payback is completed and will give you upfront the money your business needs. Oftentimes, the business owner will  be approved even with a less than great credit history record, making a merchant cash advance a top funding choice, although the approval is much easier than it is with most bank loans, few cash advance lenders will lend to new merchants or start-ups without a history of credit card statements. Even less lenders will approve amounts larger than what the business can predict to earn from credit card sales in a year. The lenders takes all of the risk, but since it is paid out of projected future sales, it is typically a risk worth-taking. Seasonal businesses that need cash flow to move them through slow seasons or merchants who have an unexpected low seasons, may find a need for a cash advance until business picks up.

There are many times when owners of healthy small businesses could use cash flow or working capital to help build their businesses but don't qualify for the traditional bank loans. These include franchise owners who have exhausted their personal savings to purchase their franchise and would like to open another one; merchants who can buy bulk inventory at discount rates or move into a new more efficient locations; expansions; new equipment or simply the desire to move forward on a great new opportunity would definitely avail cash advance.

Strategies to finance short-term working capital needs much greater attentions than are usually practiced. Precisely speaking, there are two short-term working capital financing options; business cash advance program and short-term commercial mortgage loan programs that have been often overlooked. But these two working capital funding options are excellent for small and new business ventures toward initial financial obstructions off their way. Business cash advance is one of the best financing options for businesses accepting credit cards as mode of payment.

For more clarifications - to acquire merchant cash advance:

     A-B is not required

     No tax return or financial statements are required

     Business owner is not personally liable for the cash advance amount

     No application fees or closing costs

     A simple application process 

     Approve within 24 hours

Now, it is easy to understand why cash advances are widely accepted in the business community and steadily increasing in popularity. In the Philippines, many straight lending institutions are also playing with it; however, they used to convert customer's postdated checks into cash which is eligible to those whose business normally accept postdated check payments.