South Florida Working Capital Loans vs. Merchant Cash Advances

Article Written By: susanbecker61

If you have got a business plan and you are ready to start up your small business in South Florida, chances are you are looking for some kind of financial backing. Proper funding is an integral part of getting your business plan off of the computer screen, and into the real world.

Even small businesses have a myriad of start up expenses, and you don't want to be struggling to afford your basic start up, not to mention the holding period all new businesses have to get through before the first client checks start to kick in. As a South Florida merchant, funding can be typically found in two ways. You can either get a small business loan, or opt for a merchant cash advance.

The most common types of small business loans available to new business owners are called working capital loans. In South Florida, working capital loans come in all shapes and sizes. A company's working capital reveals more about the financial stability of a company than almost any other information, so the more capital you have to work with, the better condition your company is in.

Unfortunately, most small businesses don't have a lot of working capital when they are starting up, that is where working capital loans come in. There are basically four types of working capital loans small business owners should be aware of:

* Equity: Loans based on equity from property or equipment, investor funds or other businesses.

* Trade Creditor: These loans are basically credit extended by another merchant to allow you to purchase a specific amount of their product. Trade creditors check your credit history for approval, and report to the major credit bureaus.

* Line of Credit: Credit extended by a bank or financial institution. These flexible loans can be a cash credit, overdraft, a demand or term loan, export credit, or discounting.

* Short Term Loan: Loans that mature within one year. Short term loans are virtually guaranteed to applicants with positive and established business credit scores.

Having the financial resources to get your business off to a good start is mandatory, but getting a working capital loan in South Florida in today s economy can be difficult. The loan process is typically lengthy, involving excessive paperwork, collateral, personal guarantees, and fairly low approval rates. This is why some business owners prefer merchant cash advances.

Getting a merchant cash advance in South Florida is an easy alternative. Cash advance providers offer large lump sums in exchange for a share of future sales. You can receive up to $250,000 in just 7 days, but this easy funding option does have its downside. Cash advance providers charge much higher interest than working capital loan providers, with interest rates ranging from 60% to 200%.

Unlike loans, they have no fixed payments or due date, instead collecting a set sales percentage until the debt is repaid. The cost of this funding may be too high for some, but ultimately you need to decide what s best for you and your business. Whether you choose a working capital loan or a merchant cash advance, in the business world the bottom line is: you ve got to have money to make money.

About the Author

For more information on South Florida merchant funding or South Florida working capital loans please visit http://www.fortiscapitalfunding.com.

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