What Do You Need To Know About Business Loans Based On Your Credit Card Sales?

Are you looking for quick and easy business loans?

Do you use a credit card for your business transactions?

If yes is your answer, you can get the approval of your business loan from the best credit money lender based on your credit card sales.

If you are processing over $8,000/month in your American Express, Visa, Discover or Mastermind credit cards, it’s easier to get the funding approval based on your credit card transactions.

But that’s not the only information you need to know before you apply for credit card business loans.

Let’s dive into the nitty-gritty you need to understand before you get the approval of your business loans based on credit card sales.

Why are credit card business loans ideal for you?

There are many benefits of getting business loans based on your credit card sales; let’s go through a few of the major benefits.

Easy loan processing

Compared to all the traditional business loans, getting the approval of a credit card-based business loan is easier. You only need to provide the merchant with your credit application, processing statement, and business bank statement.

Once the cash advance lender checks all the documents, you’ll be provided with the offer, and your loan approval will take hardly 24 hours. You can escape all the waiting periods and the complications involved in conventional business loan processing.

You don’t need a high credit score

Financial institutions and traditional lenders require at least a credit score of 700 to approve a small-scale business loan. But if you apply for a business loan based on a credit card, you need a credit card score below 500. 

Because you repay the loan by splitting your processing transactions of the credit card, the restructuring helps minimize the risk for the lender, and it helps the lender provide funds to the merchant even with bad credit.

More flexibility

The traditional financial institutions have a minimum requirement for the business to operate for at least three years. Still, in the case of credit card businesses loans, the number is reduced up to 6-12 months. You get the loan approval and invest in your business to scale it.

There are fewer complications and more flexibility with the terms and conditions in the case of a credit card-based business loan.

High approval rate

With minimal complications, the approval rate increases, and you can easily raise immediate funds to improve your business and scale it to new heights.

If you apply for a business loan with any traditional financial institution, the chances of your approval are around 40%, and the number is decreased to 20% when it’s a large financial institution.

An MCA split lender (Merchant Cash Advance) has a higher approval rate of 95% compared to traditional lenders’ approval rates.

No collateral

Conventional banks ask for collateral that is more than the amount they are lending to your business, but this barrier is removed in case of a credit cash bank loan. 

You don’t have anything at stake as collateral if you cannot repay the loan. That doesn’t mean you shouldn’t. 

The repayment flow is every day in case an MCA lender split funding. 

Didn’t understand the concept clearly?

Let’s talk about that.

What’s The Process Of Repayment In the Case Of A Credit Card Business Loan?

Once you apply for a credit card business loan, the process is faster than other traditional methods because of the lower risk involved.

The lender has to rely on the borrower to repay the EMI daily compared to the traditional loan. Still, the amount is paid daily through the splits linked with the merchant’s credit processing accounts with the MCA lender funding.

The lender needs to agree to pay the lender every day a certain percentage before the funds are provided. This reduces the lender’s risk of recovering their money with the interest rates.

The split funding is preferred by all the parties involved because it has lower interest rates and a shorter loan duration. Have a look at different types of credit card business loans.

Types of Credit Card Business Loans

There are two types of credit card business loans you can app for:

  • Split funding
  • Lockbox

In the case of split funding, the interest rates are around 1-2 %, and the lender receives the remittance every day from the borrower. The duration of the loan term is around 4-24 months, and there’s no delay in releasing the loan funds.

But with a lockbox, which is also uncommon of the two, there’s a delay of one day to receive the funds. The interest rates are also higher at 8-10% than the split funding. The loan term is also around 1-10 years.

It’s Your Time To Take The Decision

Now that you know all the basics before applying for a credit card-based business loan. It will be easier for you to decide based on the above information.

We hope you make the best decision for your business and scale it to new heights.


TBN Editor

Time Business News Editor Team