Financing a business can be challenging at times, especially for small businesses. When a business cannot finance itself, the management decides to take a loan or borrow from friends and family. But what options do you have to get the capital, and what is your starting point?
Many opt for the traditional process to acquire the loan. This involves banks and other old loan systems. These are, however, not the only options in today’s world. There are new and modern ways to get a loan for your small business in simple steps. This article will reveal the options, so read on.
Have you heard of Blursoft? Blursoft is a company that offers finance to start-ups. If you knew about this company, you might have questions, such as what are merchant cash advance loans and Blursoft capital. Is it a smart choice for your business? And how to apply for them and so on. We will explore your questions in this article until we understand everything. This will help you decide before applying for any conventional bank loans.
What Is Blursoft
Before anything else, we need to know what blur soft is, its purpose, and when it was founded.
Blursoft is a financial solution company that was founded in 2015 with the aim of helping small businesses grow by providing merchant cash advances. The company has rapidly become a reliable merchant cash advance that businesses of all sizes look up to.
The company became famous for its customer-centric approach and commitment to providing tailored financial assistance. The company has crossed beyond conventional lending and uses cutting-edge technology to deliver timely, effective, and strategic financial support.
What Is Merchant Cash Advance Blursoft?
A Merchant Cash Advance (MCA) is a financing solution for businesses requiring quick funding access. In other words, it is short-term financing that a small business owner is required to repay through a percentage of the business’s future credit card and debit card sales.
The Merchant Cash Advance is not a loan in this case. They are a sale of a portion of future credit and debit card sales. Blursoft, on the other hand, is a company that makes this type of financing easier for a small business.
The company has an MCA program gives small businesses up to $25,000 in funding with no collateral required. Blursoft also gives businesses a grace period of 6 to 18 months until they can repay. There is a daily draw that helps the business repay the advance by cutting a percentage of the business’s daily credit card sales.
Merchant Cash Advance highly favors small businesses that require urgent or short-term financing and have a steady stream of credit cards. With this option, businesses with some months with high sales and others with low sales can benefit.
How the concept and mechanics of an MCA work
After understanding what Merchant Cash Advance is, you might wonder about its concept and mechanics. The concept and mechanics of merchant cash advances follow a straightforward and innovative financing approach, making it stand out from the traditional loan structures.
In this segment, we will discuss these concepts and mechanisms in depth and later see why it is loved. Without further ado, below is the concept and mechanics of MCA.
- Upfront Cash Injection
This means that a business that has applied for an MCA with a merchant advance company, such as Blursoft, receives an upfront lump sum payment. The financial supplier gives this to the customer to help the business cater to immediate financial needs, such as inventory restocking, equipment upgrades, or expansion projects.
- Future Sales-Based Repayment
Future sales-based repayment means that the business owner and the financial supplier, such as Blursoft, agree that the borrower shall repay by a percentage of their future credit card sales. It simply means that the amount of money the borrower will repay fluctuates depending on how much they sell.
This repayment system is designed to be linked to the business’s revenue streams. For example, if you own a business and take out a $10000 MCA rate that has a factor rate of 1.25%, you will repay $12500 over the life of the advance. So if you generate a credit sale of $10000 per month, you will repay $1250.
However, if your business generates an increased credit sale of $20000 per month, you will have to repay $2500 per month. Hence this mechanism can be advantageous to businesses that have unpredictable sales. If their sales increase, they will repay more money; if their sales decrease, they will repay less.
A future sales-based repayment mechanism is the best approach that helps businesses repay their MCA even when their sales are inconsistent.
- Sales-Based Repayment Structure
This repayment mechanism is beneficial to businesses, unlike traditional services such as bank loans involving fixed loan repayment. In MCA, the repayment process depends on the volume of credit card transactions the business processes.
When the business gets higher sales in a month, the repayment amount is proportionally larger, while slower sales result in smaller repayment amounts.
- Automatic Repayment
The reason why MCA is loved is because repayments are automated. The lender is granted permission to deduct the agreed-upon percentage from daily or weekly credit card sales. Automation makes the process simple and fast and reduces the amount of paperwork and administrative work that needs to be done.
In more detail, a business that applies for MCA and picks the automated repayment system will not undergo much paperwork as it would if it applied through a traditional process. This is because the automated system collects the necessary information from the business system, saving time and effort.
- Flexible Terms
MCA agreements usually have flexible terms based on the business’s credit card sales performance. This benefits businesses because it ensures that rigid timelines do not constrain businesses.
- Speed and Accessibility
When businesses apply for merchant cash advances, they are sure of expedited approval and funding process. It means that business access the funds they request in a short time. This makes MCA the best and attracts businesses that require urgent funds.
- Risk and Factor Rate
One of the best things about merchant cash advances is that they include factor rates alongside the repayment amount. With these rates, a business can clearly understand the total to repay. It works by multiplying the factor rate with the initial advance.
The factor rate is important to consider when choosing an MCA, as it will significantly impact the total cost of the loan. Businesses should compare factor rates from different lenders to find the best deal.
Why choose Merchant Cash Advance Blursoft as a business owner
One of the main reasons business owners love Merchant Cash Advance is that it is rapid and simple to receive. Unlike loans with extra costs and transactions, especially when you need to borrow a considerable sum.
Businesses that need urgent short term should consider the merchant cash advance blur soft, a process that involves companies taking out loans from financial institutions. Here you are not required to do much paperwork to use the money for their gain.
It is also best to note that these loans typically have no interest, which provides firms with additional liquidity and better financial results.
Businesses not advanced in financial growth can obtain short-term funding options with Blursoft Capital’s merchant cash advance. This will enable them to continue operating their businesses even in the toughest times of the economy.
Overall, Blursoft Capital merchant cash advance (MCA) suppliers provide funds to their customers ranging from $5000 to $500,000 over two years, meaning that a business can get up to $25000 annually. This can be a solution to all the financial challenges of any business.
Advantages and Disadvantages Of A Merchant Cash Advance
Advantages of Merchant Cash Advance Blursoft
When using Merchant Cash Advance in business comes along with various advantages. Below we have discussed in detail some of the advantages.
1. Quick access to funds
Quick access to funds is a major advantage of Merchant Cash Advance because it is fast and simple to apply for the money you need immediately for your business. They give a quick solution for businesses needing immediate financial funding, unlike traditional loans that can take weeks or months for the money to be processed. They also require fewer documents to start processing the funding.
They take care of the paperwork and create a scheme that perfectly works with your lineup, even within a short period. This is advantageous, especially for small businesses that may not be qualified for traditional loans but still are in need of financial funding.
2. Flexible repayment based on sales
A merchant Cash advance works differently in that it gives businesses flexible repayment terms that are particularly based on sales of the business rather than the traditional loans that operate on a monthly fixed schedule. The repayment plan is made in that the business owner repays the money depending on the daily sales, hence during bad days when the sales are low. The amount paid is low, and during good days, and the sales are high, then the amount paid is high, enabling the businesses to repay the advance quickly.
Flexibility eases the financial burden for the business owner and gives them control over their finances, and ensures that fixed monthly payments do not move them. This flexible payment plan is beneficial, especially for businesses with fluctuations in sales.
3. No credit check
Another advantage that comes with a merchant Cash advance is that there are no credit checks to worry about when applying for financial funding. Therefore, even if your business has a poor credit history, they will allow you to apply for financial funding, unlike the traditional loans that operate based on credit checks to determine whether to give you financial funding. Merchant Cash advance mainly focuses on the sales history rather than a good credit history.
4. No collateral required
A merchant Cash advance does not require collateral as security for a cash advance. This means that businesses do not need to provide collaterals such as valuable assets, reducing the risks that businesses have to incur by putting their assets in line.
Merchant Cash Advance Blursoft only reviews businesses’ revenue history and future income to determine if it is eligible for financial funding.
5. Provide Help for customers
Also, merchant Cash Advance Blursoft offers good customer service. They have employees that are always available to assist customers at any time, whether they have questions or concerns regarding merchant Cash Advance Blursoft. They also help businesses apply for financial funding and help customers understand the payment terms.
Disadvantages of merchant Cash advance Blursoft
Using merchant Cash advance, Blursoft can also have its drawbacks. Some of the disadvantages are highlighted below.
1. Expensive due to its high fees and interest rates
Although merchant Cash Advance Blursoft offers quick access to funds, it comes with a disadvantage because it charges high fees and interest rates. These high fees and interest rates are affiliated with cash advances that can be much higher than the charges charged in traditional loans.
These high fees and interest rates may financially burden your business if you ask for financial funding from merchant Cash Advance Blursoft. Hence even, it may be hard to make profits from the funding.
2. Short repayment terms
Compared to traditional loans, merchant Cash advance Blursoft has short repayment terms, which can be disadvantageous if you have a bad financial situation. This is because short repayment terms mean the business has to pay the cash advances daily or weekly quickly. Hence it will require the business to make higher daily or weekly payments which may be difficult if your business has low revenues.
3. Limited use of long-term financing
Merchant Cash Advance Blursoft has limitations when using long-term financing since it is mostly used for short-term financing.
In most cases, they give quick access to funds to businesses requiring immediate funding and cannot get traditional financing. This ensures they can give back cash advances in short-term and not long-term repayment terms. Also, long-term financing may be more expensive because of the high-interest rates and high fees.
4. Can cause cash flow harm
Due to the short-term repayment plan that requires the business to make payments on a daily or weekly basis, it may cause cash flow problems. This is especially for businesses that experience irregular revenue patterns, causing financial strains to meet the required repayment terms.
5. Limits the amount that a business can borrow
Merchant Cash Advance Blursoft also considers the number of average sales that a business makes daily. This helps them decide on the appropriate funds they should give you, which means that the higher the sales, the higher the funds the business will receive.
6. Limited decision making
In the merchant Cash advance Blursoft contract, some policies limit a business owner to make some decisions. Some of these decisions include changing the business’s location or business hours during the contract term.
Is it Easy To Get A Cash Merchant Advance?
Getting a merchant cash advance is not as complicated as you might think. There are many different lenders that offer merchant cash advances with a simple online application and fast approval.
The application process takes a little time and does not require your bank statement or how you have been spending or earning as a business. So it is best to remember that even if you have a limited history and weak to mediocre credit, you might be qualified for a merchant cash advance.
If you discover that a merchant cash advance best fits your needs, the next thing to do is find a provider that offers favorable terms. If you own a Shopify store using Shopify payment, you can also explore eligibility with Shopify Capital.
Should you opt for an alternative provider, ensure you’re prepared to include the following details in your application:
- Business structure
- Current business revenue
- Projected revenue growth
- Recent bank account statements
- Statements from credit card processing
Criteria For Borrowing From Cash Advance Blursoft
The criteria for borrowing cash advances from Blursoft require the business to have met the following conditions.
- YourYour business must be four months old
- Your business can generate $10000 per month in sales.
- Maintaining a crest or debit score of 500 or above.
If you meet the conditions, you can now follow these steps to complete the application.
You will be provided with an application form by your merchant cash advance lender, which you must fill out. If you are applying to Blursoft, a funding specialist will contact you to review your application.
You will get notified when your application is accepted, and your funds will be deposited into your account within 24 hours. This feature applies to Blursoft customers and can be different when using other financial lenders companies. Well, ensure your application is connected to your bank account to get this speedy fund transaction.
If you face any problems, you can always contact Blursoft support, and you will get assistance.
What Documents Will You Require To Qualify For The Merchant Cash Advance Blursoft?
You must be at least 18 years old and have a credit score of at least 500 before applying for a merchant cash advance. However, the best thing is that the Merchant cash advance does not reveal the minimum annual income eligibility for the applicants.
Also, all U.S citizens and permanent residents, and green car holders are eligible for Merchant Cash Advance Blursoft services. Those are some of the common things you need to know before checking the documents a business must have. If you meet those mentioned above, you can check the below list of documents every entrepreneur or business handler should have.
- Applicant’s driver’s license
- Or any other photo ID proof
- Social security numbers
- The time in Business (Doing business for at least four months)
- Businesses need to generate $10,000 per month in sales
- Maintaining a credit or debit score of 500 or above
What are the terms and features
The common terms involved with most merchant cash advances include.
- Factor rate
- Payment period and frequency
- Percentage deduction of credit card sales
Principal refers to the money you can borrow from a merchant cash advance (MCA) lender. It is the amount that you will eventually have to repay, plus interest. You will start repaying the principal as soon as you receive the funds, and the repayment terms for many merchant cash advances are 6 to 18 months.
When you continue making payments to the merchant cash advance, the principal, on the other hand, reduces. The remaining amount will be used to pay the fee set by your factor rate.
The factor rate determines the cost of the MCA. For example, if you own a business and take out a $10000 MCA rate that has a factor rate of 1.25%, you will repay $12500 over the life of the advance. So if you generate a credit sale of $10000 per month, you will repay $1250.
However, it is best to note that the factor rate for different lenders differ and can range from 1.09 to 1.5. Blursoft rates may range between 1.2 to 1.4.
Payment Period And Frequency
The payment period and frequency are the same as payment terms, which refers to the time you will take to repay the loan. As for Blursoft, the repayment period for merchant cash advances ranges from 6 to 18 months.
It is also best advised you check the repayment terms and frequency for merchant cash advances can vary depending on the lender. It would be best to compare the offers from different lenders before concluding.
Percentage Deduction Of Credit Card Sales
You should know that merchant cash advances are relaid through a percentage of future credit sales, and the percentage is normally known as holdback or draw. The draw can vary depending on the lender but normally range from 5% to 20%.
Are Merchant Cash Advances Legal?
Merchant cash advances are legal. It would be best to understand that they are not considered loans, which involve acquiring and disposing of future earnings. Also, the fact that these advances are not made for longer than a year, lending companies get exempted from the regulations that conventional lenders are obligated to follow.
Additionally, a borrower needs to know that the Fees related to merchant cash advances are not technically interest rates. The rates paid for a merchant cash advance are higher than a bank. Also, the factor rate paid as a fee calculates merchant cash advance fees. The annual percentage rate (APR), which is a measure of the total cost of borrowing money, cannot be higher than 200% of the advance amount for merchant cash advances.
This means a merchant cash advance fee is a fixed price for receiving the advance. As you repay the advance, your total debt does not change.
To differentiate bank loans and merchant cash advances, you must know that banks are subject to federal and state regulations protecting consumers from unscrupulous lending practices. In contrast, merchant cash advance companies such as Blursoft are not included in these regulations because they purchase future receivables rather than making loans.
With the state usury laws, banks have a limited amount that they can charge on loans, but merchant cash advance companies which are not subject to the laws, are seen to charge very high fees.
What are the differences between loans and merchant cash advance
While both loans and merchant cash advances represent distinct approaches to obtaining business funding, many differences distinguish them. They both have different structures, repayment terms, and implications for businesses.
The most common and known way of getting funds is through loans from a lender such as a bank, credit union, or online lending platform. Here the borrower and lending company agree on the repayment terms, mostly to repay the principal amount plus interest over a predetermined period. Loans often come with fixed repayment time and are usually in the form of monthly installments and have the principal and the interest.
There is a collateral or personal guarantee to secure the loan. This sometimes becomes hectic for businesses, so they opt for other options like merchant cash advances.
A merchant cash advance is the most common alternative to the traditional method. It offers a business an upfront lump sum in exchange for a portion of future credit card sales. Also, MCA does not require fixed monthly installments like in banks. The repayment terms depend on the business’s daily or weekly credit card transactions.
Another major difference between loans and merchant cash advances is how lenders assess eligibility and risk. There is a heavy emphasis on credit scores and collateral for bank loans, while MCAs focus on a business’s credit card sales history and projected future revenue.
What Happens If You Are Unable To Pay A Marchant Cash Advance?
If you are unable to pay a merchant cash advance (MCA), you may face several consequences. The lender, for example, blursoft, may charge you late fees and penalties, damage your credit score, repossess business assets, or even sue you.
Before taking out any merchant cash advance, weighing your business strengths and weaknesses and carefully considering the risks involved is best.
If you are facing financial problems and cannot make payments to the mca company, you can do a few things to avoid defaulting on your loan. You can look for alternative funding sources, negotiate with the lender, or change your business budget.
If you choose Blursoft, you are free to contact their customer service team and get in touch with a representative. You can also visit their contact page and leave your message there. A representative will see it and get back to you shortly. You can also email firstname.lastname@example.org or call me for more information.
In conclusion, merchant cash advance blur soft is the best fit for businesses and companies that require short-term financing aid. A merchant cash advance can help you in several ways, including boosting your business growth to lead in your niche and be ahead of other businesses in the same niche.
In my opinion, blursoft is the solution to such needs. You can start your application today. However, you need to understand that they can deny your request without explaining any further. However, they will send you a reply to inform you about the denial, so you don’t have to wait for long. On the other hand, if they accept your financial request, you will receive the funds immediately in your account within 24 hours.
Also, before applying, you should carefully review all the information and consider the advice of finance attorneys and experts.
Frequently Asked Questions
1. What is Merchant Cash Advance, and how does it work?
Merchant Cash Advance is a financing option in that a lender offers a particular amount of funds to a business, and in exchange, they receive a share of the business’s future sales. The repayment of the funds is made by daily, weekly, or monthly sales payments as per the contract agreement.
2. How can I qualify for a Merchant Cash Advance?
To qualify for a Merchant Cash Advance, you must have been in business for at least six months and have a minimum monthly revenue of $5000. They may also consider other factors, such as credit transactions, and can be asked to provide the business’s financial documents, such as the profit and loss statements.
3. Is Merchant Cash Advance legal?
Yes, Merchant Cash Advance is legal. This is because they are perceived as a form of business financing targeting small businesses rather than a loan. Hence they are different and do not follow the same regulations as bank loans.
4. Can I get Merchant cash advances with bad credit?
Yes, this is because the merchant Cash advances mostly concentrate on cash flows, credit, and debit transactions. Therefore, it is disadvantageous for start-up businesses since they have not yet established a good cash flow.
5. What happens if I default on a merchant Cash advance?
If, by chance, you default on merchant cash advances and you cannot make the payments at the right time, the lender may sue your business. The merchant cash advances may also sue you if your contract has a personal guarantee and the business cannot make payments at the right time.
6. What are the terms and fees applied in Merchant Cash Advance?
The terms and fees applied in Merchant Cash Advance can differ depending on the lender. Once you apply for cash advances and are qualified, you are given a contract with the lender’s terms; the cash advances are repaid according to the agreed terms. Also, the fees for receiving financial funding may differ depending on the lender. Some of the fees are origination fees and interest rates that represent the cost of the cash advances.