Most people who are in business right now have had their starts during the 2007 Great Recession. It was a time when banks were dealing with bad loan fallout, and were beginning to tighten their belts. People were being rejected for loans left and right - and it made getting a loan nearly impossible. If you were like many people, you may have noticed how hard it was to get a job, get funding, or even just get customers in the door. Everyone was cash-strapped, and that left businesses wondering what they could do in order to make ends meet.
Economists are now saying that the rise of cash advances was no mere coincidence when it came to helping the economy turn around. With the high acceptance rates, no need for credit score checking, and no repossession of collateral, merchant cash advances acted like a sure thing in an unsure economy. In many cases, businesses were saved or almost totally funded through a well-planned cash advance move.
Cash advances were there, very simply, when no one else in business financing was. While banks scoffed and used their borderline elitist behavior to try to maintain a chokehold on the economy, merchant cash advances were there for the businesses that banks turned away. Many of the big names today were, at one point or another, turned away from big banks because they “were too small,” or “were run by people who weren’t experienced.” And, many of those businesses are now thriving.
Economists are now noting several things about merchant cash advances that weren’t true 10 years ago…
They’re a huge threat to banks. In fact, many banks are now scrambling to smear cash advances as “legal loan sharking.” However, their efforts are failing because business owners know better. So, banks now have to struggle to regain the customers they refused before. They are no longer stigmatized. Simply put, they’re no longer seen as dodgy, shady business tactics. Cash advances are very common, and very well liked by people in the professional world. Businesses are seeing them as a major tool when it comes to avoiding collateral. Banks require collateral for most major loans. Business cash advances do not. As a result, smart entrepreneurs are using cash advances in lieu of risking their business assets, or even their home.
Merchant cash advances now account for about 21% of all franchise funding opportunities - and that’s a huge number that’s growing. If you need a cash advance, call CPS today.