Cash Advance For Small Businesses – SME Lending Growth by Merchant Cash Advance Banks Falling Oxford Economics recently published a study called ‘Small Business Big Business’, which found that bank lending to SMEs has fallen by 3% since 2015. Credit reserves of large companies make up 43%. The report states that SMEs are being given the “cold shoulder”, affecting […]
Oxford Economics recently published a study called Small Business Big Business, which found that bank lending to SMEs has fallen by 3% since 2015. The report says that SMEs are “chilling”, affecting the recovery of small companies.
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Sam Moore, director of Oxford Economics, said the research results were a “stark reminder” of the “increasing challenges small businesses face in dealing with the traditional banking sector”. Although SMEs are responsible for half of employment and 50-60% of GDP in industrialized countries, banks are still mainly focused on lending to large companies. A primary factor in this is the “rollover effect” of the financial crisis of ten years ago, the effect of which is still felt in the small business lending market today.
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Consumers’ access to their money and the financial products they choose has changed dramatically as technology continues to advance at an incredibly rapid pace. Oxford Economics states that an estimated one-third of all digital consumers are now using some form of FinTech (financial technology). These range from applications that allow you to get a loan, online banking or investing in stocks, among others.
Small businesses, due to the poor treatment of banks, are also starting to connect with FinTech. As the financial services landscape changes due to numerous innovations in the sector, the reliance on traditional banks has fallen significantly in favor of FinTech solutions.
A merchant cash advance – or MCA – is an alternative form of business financing for small businesses and sole traders. While traditional bank loans require borrowers to pay back a set amount of money on specific dates over time, a trade cash advance – also known as a business cash advance – works on a completely different basis, with repayments prorated at any time. rotation. This is because it is a form of financing based on the company’s credit or debit card transactions.
Given the difficulty of obtaining a traditional bank loan for many companies, it is understandable that many are turning to this innovative source of financing.
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A merchant cash advance has many advantages. For example, during periods of higher turnover when the business is making more money, more MCA will automatically be paid back, compared to worse periods when not as much is being paid out. With MCA there’s also no need to worry about keeping cash on hand to pay on a certain date – it’s a truly flexible, scalable and manageable form of business finance.
With high approval rates, approvals in just 24 hours, zero APR, no fixed term, no other hidden fees, and no need for insurance or a business plan, merchant cash advances are becoming an increasingly valuable part of many businesses. money management.
An MCA also frees you up to use other types of financing alongside it, such as a bank loan or equipment lease, knowing that an MCA won’t jeopardize your entire financial future like other loans can if you default. Track payments.
Given such wide-ranging benefits as outlined above, it’s no wonder that so many businesses that would otherwise struggle to raise funds – particularly in the leisure sector such as bars, restaurants, clubs and shops – are increasingly turning to their future loans. Card accounts as a way of securing fast financing through MCA.
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