Category: Business

Questions To Ask a Merchant Lender When Applying For a Business Loan

Imagine the scenario. You are a business owner and you need some quick cash soon to expand your business. You realize that you don’t have cash in your account. What’s the solution? You apply for a business loan. But to your utter dismay, the loan application gets rejected or takes time to get approved. The only solution to deal with it is to seek the help of merchant cash advance lenders in Canada.

Yes, you heard that. When you don’t have options for business loans, talking with a merchant lender would solve the issue. In case, you start to ponder how a merchant lender could help you out, just go through the rest of the blog post.

Questions To Ask a Merchant Lender before Taking a Loan

Do you need some money for your business? If you need some quick capital, merchant lenders could be helpful. The merchant lenders help business professionals with a huge sum of money or advances against future credit card or debit card sales receivables. This process is usually termed as Merchant Cash Advance (MCA) and it’s regarded as a smart financing option.

In case, you are planning to take the help of merchant cash advance lenders in Canada, you should come up with the following questions.

  • Does the Lender Offer a Loan Term that’s Suitable for Your Business?

Business owners think that they can fill an online business loan application request and ask for any terms they feel like. Well, before going through the application process, it’s important to get in touch with the lender and ask for the terms. It won’t fulfill your purpose if you are applying a loan for six-months and the lender offers loan terms of one year and more. Hence, asking questions would help you in your search for lenders that would meet your objective.

  • Is There A Grace Period?

In business, there is no guarantee that the cash flow would remain the same every month. In one month, there might be a huge cash flow; whereas on the other, it would be almost nil. It’s better to ask if the lender would penalize for late payment. Ask whether the merchant cash advance lenders in Canada would accept late payment. Or, if the payment made during the grace period would put the interest rate in peril. Asking questions would clear doubts regarding late payment.

  • Do They Extend Loan To Companies With Not A Perfect Credit Score?

A company’s credit score is vital when applying for MCA. There’s nothing wrong to ask the lender if the credit score meets the requirements of the lender, before the final submission of the form.

  • Are There Penalties For Early Payment?

Business owners should focus on making payments on time. However, one also needs to know about the consequences if they make the payments a bit early. One shouldn’t think that the lender would reduce the interest if the payment is made before time. Some lenders include a clause that penalizes for making early payments. While paying off before the date is rare; still, asking questions about early payments would reduce the risk.

Hopefully, you are now aware of the questions that you need to ask a merchant lender before seeking their help. If the merchant cash advance lenders in Canada answers the questions properly, you can surely apply to them for a cash advance.