When it comes to e-commerce funding, business owners have a variety of options to choose from.

Below we’ll break down the various ways e-commerce businesses can fund their future sales growth, and offer suggestions and solutions for Canadian small businesses that need access to additional working capital quickly and easily.

Choosing the right option could help you move your business plan forward, getting you the e-commerce financing you need to solve immediate problems, or continue your growth and make it to the next level in a competitive market.

Cash Flow Solutions for Cash Flow Problems

Why does an e-comm business need working capital for today? Lot’s of reasons! Business growth can come in many shapes and sizes, so bringing additional dollars into the mix can do anything from cover marketing expenses to purchasing inventory to building infrastructure.

And of course, the search for e-comm funding isn’t always about financing growth - sometimes a small business will need it to help with temporary downturns, to solve unexpected problems or cash crunches.

Either way, if you run an e-commerce platform, have a proven track record of success and solid monthly revenue, there is a funding model that will work for you out there. There is certainly no reason why you should be slowed down by red tape or delays that you typically see with a financial institution like a bank.

 

E-Commerce Financing Options: Should You Use Equity Financing?

There are many ways to raise funds, from venture capital to personal savings to business loans to merchant cash advances. However, if you have a growing business and don’t want to give up equity in order to access the financing you need, you’ll probably want to avoid equity financing.

Equity financing, which is when you sell a portion of the business in exchange for a capital infusion, has some advantages, like the fact that funds won’t need to be paid back being a particularly attractive one. However, offering someone an ownership stake means you dilute the ownership of your own business, and will mean you’re not the only one making the decisions for that business.

Equity financing typically breaks down into four general categories.

Angel Investors

This category of equity financing is similar to venture capital funding, but depends less on data analysis to acquire funding approval. An angel investor is often someone in the business or startup’s personal or professional orbit.

Venture Capital

A popular option for early-stage startups, venture capital (VC) firms offer more than just financing, they offer expertise and advice. Acquiring the funding can be a more difficult process, as VCs usually require some form of board of directors and reporting structure to be instituted in order for them to take a stake in the business.

Friends & Family

Asking the people closest to you for funding might seem like a good idea right off the bat, since you all know each other and a certain degree of trust already exists between you. However, not all friends and family groups can raise the amount of money an e-commerce business might need, and the old adage is in play here: money and blood don’t always mix. If you offer equity to this group, lawyers and black-and-white contracts should be involved in order to try and avoid future disagreements.

Initial Public Offerings

Depending on the size and complexity of your business, an initial public offering (IPO) could be an equity finance solution. But “going public” can be an onerous and difficult process, and will require business owners to make information public regarding suppliers, financial reports, customers, and more. If you need less than half a million dollars, this is probably not the way to go.

 

Business Loans and Other Debt Financing Options

If you’ve decided that equity financing is not the way to go for your business, then you can always choose to take on debt to finance your operations instead.

You may choose to use business credit cards, bank loans, or lines of credit, and the interest payments on that debt can even be classified as tax deductions, which is a plus. However, debts need to be repaid, and this is true even if the business eventually fails.

In addition to higher interest rates, a downside of some forms of debt financing is that you may be forced to offer up some form of collateral in order to access the cash. If anything goes wrong - which is very possible in a volatile and quickly evolving economy -  a loan default will impact your credit rating, which will have ramifications for years to come.

Another downside, at least when dealing with major financial institutions like banks, is that even if you jump through all the hoops, cross the t’s and dot your i’s, you could still end up being rejected. And if you do get the loan, it could take weeks, or even months in some cases, to get approved.

Banks are conservative by nature, and will often choose not to take what they consider a risk, even though the numbers show that your e-commerce business is promising.

Revenue-Based Financing: A Better Solution?

Finally, we come to what might be the best solution for your e-comm business, especially if it is one that is doing well, has a track record of success, and simply needs additional working capital to continue its growth trajectory.

Unlike working with equity financing or traditional debt financing like bank loans or lines of credit, a revenue-based financing solution tailored specifically for e-comm sites is one that uses your existing cash flow as a source of working capital.

Because e-commerce sites typically use credit card processing as their main source of payment, it becomes very easy to repay the amount borrowed, and to automate the process in a way that makes sense for your business.

Because Merchant Growth specializes in financing small businesses in Canada, we can also provide the advantage of flexibility. The repayment plan is tailored to each individual business, and repayment terms can be daily or weekly, depending on what works best.

 

How Does it Work? Funding for E-Commerce Business Owners

Our process is streamlined - after all, it was designed to be. In fact, small businesses can receive funding in as little as 24 hours. You simply need to take part in a simple, three-step process.

Step 1: Fill out the application

This application is short and sweet. Five minutes is all you need to get the ball rolling - maybe even less. The application can be done online or over the phone. Most of the heavy lifting is done in step 2.

Step 2: Review your options

This is where an expert from Merchant Growth will get in touch with you to discuss the particulars. They’ll want to know certain information about your sales numbers, growth metrics, monthly revenue, ad performance and the nature of your business challenges in order to prepare and offer you a customized solution that is easy to work with for everyone.

Step 3: Receive your funds!

This is always the best part. Depending on the situation and the amount your business needs to continue its growth, you can often have the funds deposited into your bank in as little as 24 hours. Sometimes even on the same day!

Strong Support is Key

With funding provided in as little as 24 hours, and amounts ranging from $5,000 all the way up to $500,000, no hidden fees, and no collateral required, this is often the best financing option for e-comm sites that need a financial boost and some extra funding to continue their upward trajectory, and without having to wait weeks or months for approval.

Best of all is the continued support offered by Merchant Growth. We pride ourselves on our top-quality customer service, and are always there to act as a platform for growth, answer your questions, and make adjustments as necessary, topping off your business with any extra cash as the need arises.

What are the Minimum Requirements?

As long as you’ve been in business (in Canada) for six months and have monthly revenue of over $10,000, you can apply!

If you have been wondering how to choose the right type of business financing, it is important to start by considering your needs and goals as a small business owner. Small businesses each have their own unique set of challenges and opportunities. As such, there are a wide range of small business financing options available to suit the specific circumstances and different types of businesses.

By taking a top-down approach that carefully considers all small business financing options, you can find the right fit for your particular business needs. Ultimately, some options are better suited to certain enterprises than others, so the key is to choose wisely by selecting funding that truly supports your small business’s growth and future success.

 

 

The Starting Point for Small Business Owners

The first step is to choose between debt and equity financing. With debt financing, you take out a loan from a lender in order to fund your business. This type of financing is convenient because it does not dilute your ownership stake in the company, but it can also be more expensive due to interest payments.

With equity funding, you are seeking financing from venture capitalists by selling shares of your business in order to raise capital. This option can quickly improve your cash flow, but it ultimately means ceding control over part of your business, so it isn’t the best way to raise money if you want to protect your long-term financial interests. Also, it could also mean that you lose some control as investors can impose restrictions on how the business is run.

Once you have made this initial decision, you can then move on to consider other factors such as the type of credit facility, its interest rate, and repayment terms – each of which can have major implications for your overall financial situation. By taking a strategic approach to choosing your financing option, you can ensure that you are making the best choice for your business model, needs and long-term goals.

 

 

The Drawbacks of Traditional Small Business Loans

Demanding Application Process

When seeking a small business loan, one of the biggest challenges applicants face is the extensive paperwork and loan application process. Financial institutions typically base their lending decisions on a number of factors, including the financial health and stability of your company. As such, you will be required to provide detailed documentation related to tax returns, financial statements, and other financial documents, such as accounts receivable and accounts payable information, stretching over several years.

In addition, in most cases you will also need to obtain credit approval in order to get term loans. For those with bruised credit or a limited credit history, this can be a significant barrier to securing the financing you need.

Rigid Terms

With a commercial loan, you'll need to have a clear plan for how you'll use the money and how you'll repay it. The terms of business loans are not flexible. For small businesses that have fluctuating revenues, this may not be the best option, as making the required monthly payment schedule could create new challenges – or be entirely impossible to meet – during a downturn or slow season.

The Consequences of Default

No business loan is without risk, and it is important to carefully weigh the potential consequences of defaulting on a commercial business loan. For one thing, if your loan is secured with valuable assets, you could stand to lose those assets in the event of a default. Additionally, defaulting on a business loan can have a negative impact on your business credit score, as well as your personal credit score in some cases, which could limit your ability to get personal loans, personal lines of credit and credit cards in the future.

 

Business Loan Alternatives

Lines of Credit

One option that may be particularly well suited to many types of small businesses is a line of credit. A business line of credit offers fast, flexible access to cash in case of emergency or unexpected expenses, allowing you to draw on the funds as needed without needing to reapply every time.

Additionally, unlike a traditional business loan, a line of credit typically requires only a smaller initial commitment, making it an ideal choice for smaller businesses who are looking for a more affordable financing option than their business credit card.

Merchant Cash Advance

Merchant cash advance financing is another potential option for businesses looking to access funding in a timely and flexible manner. Unlike short term loans and other forms of traditional lending, which often come with restrictive terms and conditions, cash advances provide businesses with a lump sum of cash up front in exchange for a small percentage of future sales.

This allows entrepreneurs to leverage the growth of their business in order to access critical working capital. Thanks to flexible structures and terms, cash advances make it easier for businesses to adapt their funding arrangements as they grow and change over time.

Equipment Financing

There are many factors to consider when deciding whether or not to use equipment financing for small businesses.

On the one hand, equipment financing can be a valuable tool, helping entrepreneurs to invest in the tools needed to grow their business and increase profitability. This can be especially useful for startups that do not yet have enough working capital or credit history to purchase expensive equipment with cash.

On the other hand, equipment financing tends to carry much higher interest rates than other types of loans, meaning businesses are paying more in interest over time than they would if they had borrowed from a traditional bank. Furthermore, if your equipment doesn't perform as expected or you are unable to pay back your loan on schedule, you may face stiff financial penalties that could put your entire business at risk.

Invoice Financing

Invoice financing, also known as invoice factoring, involves the use of a third-party lender to help small businesses bridge cash flow gaps by providing funds based on outstanding invoices from clients.

On one hand, invoice financing can help businesses to cover expenses and maintain operations in between payments from clients. This flexibility can be especially important for startups or those that experience seasonal fluctuations in their business cycles. Additionally, the ease with which certain lenders provide invoice financing can make it a very attractive option for some small businesses.

This type of funding often comes at a high cost, often in the form of interest charges or fees paid each month on the outstanding balance. Additionally, some people argue that invoice financing is not always necessary for all small businesses, as many other options exist for keeping cash flow steady during difficult periods.

 

 

Finding the Financing That Meets Your Needs

As small business owners realize, there’s no such thing as free money. However, there are a variety of financing options to choose from when small businesses need some additional cash flow.

It's important for business owners to carefully weigh the pros and cons of each option, relative to their unique needs and challenges, before making a decision. If you want to explore fast and flexible funding options that can help your business, Merchant Growth can get you up to $500,000 in financing, within 24 hours of approval! Apply today!

Small businesses are the backbone of the economy, and the ones that are the most successful are usually the ones that are the most flexible and adaptable. But businesses also need access to cash, and when any challenges occur, they need to be ready - flexible, adaptable - and able to work with partners that can help them access convenient and affordable financing when they don’t have their own cash flow to dip into.

Why a Small Business Loan?

Businesses can need working capital for any number of reasons, both positive and negative.

For example, a business could experience a boom in sales and have an urgent need to hire and train additional staff. Their success could also necessitate the upfront purchase of extra equipment or the rental of additional space for them to expand operations.

Conversely, a small business could face unexpected challenges or require restructuring, leading to temporary cash crunches that limit their ability to purchase inventory or implement necessary marketing campaigns.

No matter the reason, when an infusion of working capital is required, it is common for small businesses to apply for small business loans. Below we’ll discuss some of the advantages and challenges involved in securing a small business loan, as well as offer ideas about alternative approaches small businesses can explore.

Who Offers Small Business Loans?

There are a number of places a small business can look when trying to source small business financing. Some of the most popular options include:

Banks and Traditional Financial Institutions

One of the most common loan choices for small businesses in Canada and the United States are the big banks and other major financial institutions. Because of their size, banks can offer lower interest rates than some of their competitors, making them an attractive choice and in many cases the first place a business will try to get funding.

Unfortunately, banks are generally risk averse, and will only be good choices for certain types of businesses, for example, those that can provide collateral, that have good credit, and that aren't in a hurry. In many cases, the time it takes to receive a loan can take between two and six months, and for many businesses, the terms and conditions make these loans difficult to access.

Credit Unions

Credit unions are slightly more accessible than the big banks, but they still have sizable collateral and credit score requirements. These organizations are typically private institutions, meaning that applicants must also be members before they can apply for short or long-term funding.

Community Organizations

Community organizations can sometimes be a convenient access point for new working capital, and these non-profit organizations certainly have a place supporting local communities and the start-ups and small businesses therein. These groups can be very helpful, but one downside to working with them is that it can sometimes be difficult to access large sums of capital from them.

Friends & Family

Large organizations are not the only sources of funds. Your friends and family can also help you succeed. However, this process is often fraught with peril, and is usually a last resort for small business owners - and for good reason given the challenges that can come from combining personal relationships and money!

Alternative Financiers

The online lending space is growing quickly, and is often an excellent source of funds for small businesses. Thanks to their technology-backed online loan applications, borrowers can often make much faster time than they otherwise would with large banks. Applications can often be completed in minutes or days, in contrast to the weeks or months it can take elsewhere.

Some lenders offer loans, and others focus on small business financing options that turn existing cash flow into immediate working capital. Their value is speed and convenience in addition to flexible repayment terms and schedules. These types of financing options include:

• Merchant cash advance financing
• Line of credit options
• Specialized e-commerce financing
• Fixed financing

How to Get a Small Business Loan from a Bank or Credit Union

Large financial institutions are typically conservative and risk-averse, and securing a loan means small businesses have to jump through a number of hoops to prove that they are a safe investment. However, if your business can put together a well-organized business loan application, it is possible to find success. These are some of the requirements in a typical business loan scenario.

Business Plans

Banks will often need to see a clear and detailed business plan to help them feel comfortable lending you the money. They want to understand your company’s vision, your challenges, and dig deep into the scale of your ambitions while understanding your market.

Balance Sheets, Bank Statements & Income Statements

Lenders like the big banks will often require financial documentation such as business banking statements and balance sheets to get a sense of your income, liabilities and cash flow status. Some small businesses may see yearly high and low periods, so banks and credit unions will also study the fluctuations of your business before approving anything.

Personal Financial Documents

Often, business owners will also need to provide their personal credit history in order to qualify for some loans. This means that if you have a strong personal credit report, it can greatly increase your chance of approval. On the other hand, weak credit can harm your ability to secure a loan.

Tax Returns

Banks and other traditional lenders also sometimes require that you provide tax return history. This helps the banks feel comfortable that there are no problems or discrepancies in your financial reporting that could lead to problems down the road.

In practice, this means that traditional lenders, such as major banks and credit unions, can make the application process quite challenging.

Collateral

It is common for banks to ask for collateral for a small business loan. Assets (or a personal guarantee backed by other forms of collateral) may be required to get a small business loan.

Can You Get a Small Business Loan with Bad Credit?

Businesses with bad credit, or businesses whose owners have poor personal credit, can find it difficult to secure a loan from traditional lenders like banks. If the banks eventually grant you a loan, you can be sure that a weak credit score will increase the likelihood of having a higher interest rate.

What is Considered Bad Credit?

A person or a business can have bad credit. Credit scores (measured from 0-999) are defined by the major credit bureaus (Equifax and TransUnion), and all of a business’ creditors report payment histories to those credit bureaus. Just like it is with a personal credit score, your business’ repayment history determines your credit score.

In general, credit scores are ranked like so:

• Credit Score of 800 - 850: Fantastic
• Credit Score of 740 - 799: Very Good
• Credit Score of 670 - 739: Good
• Credit Score of 580 - 669: Fair
• Credit Score of 300 - 579: Bad

What are the Alternatives to Small Business Loans from Banks?

Today, there are a wide range of services for small business financing. This includes alternative financiers that offer small business financing options totally different from loans.

Alternative financiers are often much easier to work with than the banks. Companies, like Merchant Growth, have streamlined application processes that can get cash in the hands of businesses quickly, within just a matter of days or even hours.

We don’t provide loans, we turn a business’ existing cash flow into immediate working capital without requiring detailed business plans or requiring small business owners to jump through hoops. There are only a few eligibility requirements, including:

• Business must be in Canada
• Monthly revenue must be $10,000 CAD or more
• Business history of more than six months

Other than that, it’s pretty simple to work with us. You can complete the application in just a few minutes, and once done, a financial advisor will reach out to help you determine the best solution, one tailored specifically to the needs of your business.

Should I Choose a Bank or an Alternative Financier?

The answer to this question always depends on the business in question. As mentioned above, larger banks can sometimes offer lower interest rates and a wider variety of services and loan products. The downside is all the red tape, and all the time it takes to complete the applications.

Working with an online lender that focuses exclusively on helping Canadian small businesses is another option. Highly specialized and very savvy, companies like Merchant Growth can make the process simpler, and connect you with the cash you need right away, without forcing you to take out a loan.

When time is of the essence, sometimes a loan is not the way to go. Small businesses can find much greater efficiency and flexibility with the alternatives, such as with merchant cash advances, lines of credit, fixed financing or e-commerce financing.

Merchant Cash Advances

A merchant cash advance is a lump sum provided by a lender in exchange for a percentage of a merchant’s future credit card sales and debit card sales.

Lines of Credit

A line of credit gives small businesses the freedom to access capital when they need it, repay it when they want to, and borrow again. Unlike credit card loans, a line of credit offers favorable interest rates, where you only pay interest on what you withdraw.

Fixed Solutions

These are somewhat similar to traditional business loans, and are often best used by small businesses that don’t have debit or credit sales, but that have sales primarily generated through cheques or deposits. The cash is forwarded up front and a daily or weekly payment is made automatically to repay the balance.

E-Commerce Financing

Since E-Comm sites typically rely on credit card processing as their main form of payment, repayment is made by debiting from your processed transactions. The advantage is that there is no need for collateral, no hidden fees, and businesses can receive funds in just 24 hours after approval.

Still Confused? Contact Us!

At Merchant Growth, you can grow your business with funding in as little as 24 hours. With financial solutions tailored specifically to your needs, you can receive anywhere from $5,000 to $500,000, all backed by a group of professionals that are there to support you.

Reach out today and find out what Merchant Growth can do for you!

All businesses need access to cash to thrive.

They need a healthy cash flow to invest in their future growth, to pay off high interest debt, to handle slow months, or to finance hiring or training. Whatever the industry, small business owners know that sometimes they’ll need to improve their business cash flow by borrowing.

Business owners can go the traditional route of applying for a bank loan. Depending on the nature of their business, they can also choose to get financing in the form of a merchant cash advance. Among the many small business financing options available, Canadian businesses have shown that they trust merchant cash advances to get them the money they need, given that they are extremely convenient ways to access funding quickly and easily.

What is a merchant cash advance?

A merchant cash advance is essentially a form of business loan from a lender - although technically it is not a loan, as the merchant cash advances are provided to businesses in exchange for a percentage of their future credit card sales or debit sales. It’s almost like a traditional loan from a bank, but faster and easier to acquire, and with less red tape involved.

 

 

What is the difference between merchant cash advances and business loans?

When it comes to a cash advance vs a business loan, the major difference is related to the terms and nature of the repayment.

Merchant cash advances

With a merchant cash advance, you’ll pay the loan back through credit card sales, and the amount you pay (and the frequency of your repayment) will often depend on the volume of your daily or weekly transactions, and your expected future sales.

You might hear the term “holdback” here. If your business does $1,000 worth of transactions per day with a daily “holdback” of 10%, then you’d essentially be paying back $100 per day. Similarly, a weekly holdback of 10% on the same $1,000 per day average would average about $700 per week in repayments

A merchant cash advance has the advantage of allowing a business owner a flexibility they can’t find elsewhere as online lenders will offer a merchant cash advance with either weekly or monthly payments.

Business loans

Traditional business loans, on the other hand, operate with a more conservative approach baked-in. Banks are risk-averse, and will often require more paperwork, more collateral, more detailed financial statements, and better personal credit scores. The loans they provide are also often structured with more rigid repayment terms in place, and those payments are required over a fixed period of time, locked-in in advance.

That said, while a traditional business loan from a bank leaves small businesses with less flexibility in many cases. However in certain circumstances, long-term loans can be a better fit and make more sense for some businesses. Merchant cash advance providers will often seek shorter-term repayment periods of between six and 18 months. If your business needs a large loan for a significant investment, the bank might offer you better options that are structured over a longer period of time.

Additionally, in some cases a bank can offer small business owners a slightly better interest rate on the lump sum they’ve lent out. Another advantage of using a small business loan from a bank is that the interest paid on the principal will shrink as the loan is paid back. In comparison, a merchant cash advance often will charge all of the interest on the loan upfront.

 

 

How do I choose which is right for me?

Think of merchant cash advances as short term financing, sources of working capital for elements in your business like payroll, inventory, marketing expenses. In contrast, think of a business loan as something drastically more substantive, something structured over the longer-term, such as with larger expansion plans, purchasing other businesses, etc.

Very often you’ll find that the best way to figure out what the best choice is for your small or medium sized business is to talk to a professional after doing some of your own research. To learn more about the details and answer the question: “How does a merchant cash advance for small businesses work?,” you can read our blog on the subject. But ideally, you’ll reach out to us, fill out the extremely simple application form, and we’ll get back to you within a day or so.

At Merchant Growth, we tailor our financing solutions so that they benefit both parties. That’s why we’ve prioritized our quick turn-around times on applications, and can often get cash into the hands of business owners within 24 hours of approval. We worry less about your credit score as a sole deciding factor, and more about the overall health of your business.

A merchant cash advance is a great alternative to traditional bank loans, and can secure you from $5,000 all the way up to $500,000, with no hidden fees included, and no collateral required. Our value-added is funding your bank account quickly so you can focus your attention where it is needed most: in the day-to-day operation of your business.

Contact Merchant Growth today!

If a small business was a car, then cash flow would be the gas that makes it run. Just like you need to fill up your vehicle’s tank to get anywhere, a small business needs access to financing to grow and to prosper.

A business owner might need a cash infusion to restock the shelves with products, to help pay for a new marketing initiative, or to invest in equipment that will lower their costs over the long run. Whatever the need, the problem remains the same: what is the best way to access funding quickly and easily?

Enter merchant cash advance financing.

 

What is a Merchant Cash Advance?

A merchant cash advance is a lump sum provided by a lender, which is made in exchange for a percentage of a business's future credit card sales. It’s almost like a traditional loan from a bank, but easier. Unlike other small business loans, merchant cash advance financing is also quick and efficient.

Is a Merchant Cash Advance Quick?

Once you’ve had your preliminary call, have provided the necessary information and documentation, and are approved, you can get your funds in as little as 24 hours! The alternative is to wait weeks for banks to approve the loan, something that often requires a lot more paperwork and red tape as well.

Are Merchant Cash Advances Right For Me?

The nature (and benefits) associated with merchant cash advances for small and medium sized businesses is the flexibility they bring. As such, a merchant cash advance is perfect for some situations, and less ideal for others. The key is finding a provider that views each situation as unique, and that can tailor their financial solutions to fit a variety of situations.

How Important is my Credit History?

Merchant Growth will want to review your business credit score, as well as have a look at your business bank statements. Using the information, we’ll be able to determine the best solution for your needs.The findings will affect the cash advance term length, which often ranges anywhere from six months to a year and a half.

The terms of the deal, including the interest rates you’ll pay and the schedule in which you’ll pay them, is often highly correlated with the volume of business credit card sales. The amount of transactions you process is great information for an alternative business financing company to use. Debit card sales and a history of frequent credit card sales will give the lender the information they need to determine the most mutually profitable repayment model.

 

Repayment Adapted to Your Business Model

As mentioned above, one of the best things about working with a merchant cash advance provider (as opposed to using a traditional bank loan) is the flexibility you get with a merchant cash advance.

For example, small business owners may prefer to pay back a small amount of their cash advance daily or weekly. Using future sales (credit card sales and debit purchases) as a pool to draw from, a business owner may want to have a flat rate set in advance to maintain a more consistent prediction of their available cash flow, or they may wish to have their small business loan rate change dynamically, so they can pay more when the business is busy, and less when it’s not.

Companies like Merchant Growth specialize in this kind of business.

What Can I Use My Cash Advance For?

The beauty of merchant cash advances are that they can be used for anything your business needs to survive and thrive! The money can be directed towards credit card payments, it can be used to purchase inventory, or it can be used to hire additional staff. Alternatively, the money can be used to update equipment, pay for a new marketing campaign, or pay suppliers. You can even use the money to relocate or renovate your existing business.

Only you will know the best way for the business funding to lead to improved cash flow and better financial health for your company.

What Determines the Size of my Loan? Credit Card Sales?

Every business is unique, and merchant cash advance providers take many factors into account that determine the size of the loan.

Lenders will want to know the size of your requested advance, the size of your business, your industry, your average sales, and the level of seasonality of your business. The worry is not so much about bad credit and as having a stellar credit score is not a necessity. The interest is more in the health of the business and its cash flow potential.

The best way to get answers is to fill out an online application form with a few pieces of basic information, and we will often contact you within a day or so to discuss the merchant cash advance in greater detail.

 

Are There any Minimum Requirements for Merchant Cash Advances?

Every alternative financier is different, but for Merchant Growth, there are three basic minimum requirements your company must fulfill in order to receive funding. Your business must:

1. Be located in Canada
2. Have monthly revenue of $10,000 or more
3. Have been in business for at least six months

It’s that simple!

Borrowing Money Doesn’t Have to Be Complicated

With a lightning-fast application process, merchant cash advances can be the ultimate alternative to traditional loans from the bank. While traditional financing options are often slow and conservatively managed, online lenders like Merchant Growth can connect you with the cash you need right away - often within 24 hours after getting in touch with us!

Receive anywhere from $5,000 to $500,000 with no hidden fees, and no collateral required. Once the money is in your account, you can focus your attention where it is needed most: in the day-to-day operation of your business.

Contact us today - Merchant Growth has you covered!

Filing taxes is stressful. What’s also stressful is the flood of information about the best way to do it, all the factors to consider, and how to capitalize on all the benefits and deductions that you may be eligible for.

But let’s face it, although we’re in the finance industry, we aren’t tax experts ourselves. However, in order to still do our part to help small businesses out, we’ve navigated through the content out there to bring you the essential points to get you going in the right direction. Here’s hoping this tax season is a little bit less overwhelming.

Getting Started

Take note that there are differences between claiming small business (T2125) for sole proprietors or partnerships and self-employed income, in contrast to Corporations (T2) if your business is incorporated. Incorporated businesses require a filing for just the business as it is recognized as a separate entity.

For those who are self-employed, your business identification includes:

• Business name and address.
• Your business’ industry code.
• Partner and co-owners information (if applicable).
• Your business’ fiscal period (which may or may not be the calendar year).

Find Out What Tax Deductions, Benefits, and Credits You’re Eligible For

Filing an accurate and complete claim (it may be more than you think) ensures that you don’t overpay when you don’t have to, and that you receive the highest return possible.

Claimed business expenses can include:

• Office expenses.
• Advertising expenses.
• A portion of your meal expenses.
• Vehicle expenses if you use it for your business or business deliveries.

Also to Consider:

• If you received Covid benefits, you should have received a tax slip. You must declare these benefits as they are taxable.
• If you worked from home in 2021 due to the pandemic, you may be eligible for a home-office expense claim. This may be either with a flat rate or a detailed method.

Gather and Organize the Necessary Documentation

As a general good habit practice, it’s best to make copies of documents and keep them for at least six years should you face a future review or audit. This is something that should be done year-long, but especially in preparation for tax season.

This could include:

• Receipts
• Slips
• Other documentation if you have investments or foreign holdings.

Receipts

Receipts are vital for proof of purchase but also proof of sales. Another thing that should be done year-long, but especially right before tax season is to keep track of your receipts.

When it comes to expense claims, receipts should include:

• Date of purchase.
• Your name and address.
• Name and address of seller.
• The seller’s business number (if they are registered for GST/HST).
• The description of the item or service received.

Key Dates for 2022:

When can I submit my taxes?

• Anytime - Filing opened February 21st.

When are taxes due? 

• For personal income tax -  May 2nd.
• For those who are self-employed or have a self-employed spouse or partner - June 15th. But if you have a balance owing you still need to pay that off by May 2nd.
• For incorporated businesses, tax returns are due 6 months after the corporation’s fiscal year-end.

Final Thoughts

• A great point of reference in ensuring that you haven’t forgotten anything is to check the previous year's return.
• Ask yourself if anything has changed since last year in your business setup. This may mean additional eligibility or claims.
• Whether you go the route of accountant or tax software, avoid leaving it to the last minute to allow time for you to thoroughly review before submitting.

 

Best of luck—We know you’ve got this!

Expansion financing is defined as any capital that helps a company grow. Generally speaking, there are only three ways for a company to raise capital:

1. By issuing equity capital to investors
2. By using existing capital earned from operations
3. By borrowing

While options one and two above are certainly possibilities, small businesses and larger organizations traditionally acquire expansion capital through some form of small business loan or line of credit from a bank or another lending institution. Today, alternative financiers, such as Merchant Growth, offer flex financing solutions that leverage future cash flows into immediate working capital that they can use to finance expansion.

What Can Expansion Financing Be Used For?

Since the term “expansion” can be defined in many ways, so can “expansion financing.”

Both small businesses and larger, more established businesses can use funds to expand into new markets, to fund an online advertising campaign, for equipment financing, to buy inventory, to hire or train employees, to acquire competitors, to rent new space, and much more.

The type of expansion capital you choose will vary based on the nature of your business, and the amount of money you need. However, it’s important to note that timing is crucial when it comes to expansion plans. Wait too long, and you may miss growth opportunities.

Is It a Mistake for a Small Business to Use Working Capital (Cash Reserves) Instead of a Bank Loan?

Many small business owners know how hard it is to create and sustain a successful business. They also know that even healthy businesses with plenty of cash to spend can run into unexpected market forces that reduce their available liquidity.

For example, what happens if an emergency issue dries up your available working capital? Banks are quite risk-averse, and may not be comfortable lending to a company that appears to be in financial trouble. Indeed, even if you are eventually approved for your small business loan, your company may not have the luxury of waiting a couple of months for the bank’s financing to come through.

When you need cash quickly but can’t access it, your small business (and all those people that depend on it) could be in quite a bit of trouble. That’s why when it comes to growing your business, expansion financing is usually the most prudent course of action. Sure, you’ll pay interest on the short term loan, but debt-based financing is also the safer option.

What Type of Financing Should I Use for My Business Expansion?

When it comes to business growth, every business owner has a unique set of challenges, and therefore needs to consider the options available in order to find the solution that makes sense for their specific needs.

Bank loans with strict repayment terms are the right choice for some companies, and small business loans from flexible online lenders are the best choice for others. If your priority is to get access to the cash you need quickly without the hassle of a lumbering institution slowing you down, many options exist that can connect you with the money in 24 hours or less.

Line of Credit

You might choose a line of credit option for financing of between $7,500 and $125,000 from a company like Merchant Growth. The advantage of taking that route, besides it being convenient, flexible and fast, is that businesses who use lines of credit have the freedom to access the capital when they need it, pay it off, and borrow again.

Many businesses find that it’s a better option than using business credit cards, which often have an interest rate that’s higher than necessary. With a line of credit, you only pay the interest on the actual amount advanced, and the rate is lower.

Using a line of credit can be a useful financial tool for a business, but it is better suited to purchase things like inventory or for paying operating costs, and less well-suited for larger purchases such as real estate or equipment.

Flex Financing

Or a business might find that flex financing is more to their liking when expanding their business. Also available through Merchant Growth (but designed for larger amounts of up to $500,000), flex financing turns your company’s future profits into a source of immediate working capital.

A benefit of this approach is that repayment is designed to adjust to each business’ specific cycle, meaning you can pay more when you’re busier, and less when you’re not! Thankfully there are no hidden fees and no collateral needed with flex financing from Merchant Growth. Also, you can also get the money quickly, most often in just 24 hours!

How Do You Choose Your Financing Source?

There are a number of financing options to choose from, and your choice will often be dictated by your specific business, the amount of money you need, and what you need it for.

One of the reasons so many Canadian businesses trust Merchant Growth to provide financing is their unique blend of customer care, complete transparency and their use of the latest technology, which helps them connect businesses with the cash they need quickly - much faster than it would be with banks.

Not only do they have a track record of success, but they also have a great leadership team with a ton of experience in the banking sector under their collective belts. However, when it comes to recommendations, there really is no substitute for doing your own research.

The best way to find out if Merchant Growth is the type of alternative financier that you can trust to get your business the money it needs to grow is to get in touch with them. The application form is simple, and all you need to do is enter some basic contact information to get started.

Reach out today and start growing your business!

Bundled up in sweaters, avoiding going outside to shovel the walkway…spring is likely a far off concept for Canadian small businesses. But when it comes to thinking and planning ahead, businesses need to stay on top of things in order to avoid an unfortunate last minute crunch. After all, a bit of advance preparation can go a long way when it comes to seasonal transitions.

Short Term Goals

Speak With Suppliers

As challenging as supply chain management is at the moment, it’s crucial that you speak with your suppliers as early as possible. Let them know what products and merchandise you need, but keep in mind the potential delays that may happen. As much as possible have a plan B, and even a plan C to help avoid any potential problems to the best of your abilities. While you’re at it, if you haven’t already done so, start planning for the following season beyond that as well.

Be transparent with your customers. At this point we’ve all heard about and experienced the difficulties of supply chain, so honesty is the best way to go. Let your customers know about any sudden changes which will affect stock or delays in purchases being received, and when you expect to have products. Then let them know when you have an update, when items have arrived, or when their item has been shipped. Consider including this information on your website and share it via your social media. This is also another benefit of having a customer newsletter so that you can send your customer base direct updates.

Staffing Plan

If the warmer months means you need more team members, don’t wait until you and your current team feel overwhelmed to start hiring. Part of business projections are figuring out staffing requirements throughout the year, including hiring temporary and seasonal employees to account for additional demand. For example, if you own a garage then you know first hand that the end of tire season requires additional manpower to keep up with demand. For restaurants with an outdoor space, this additional number of tables likely requires more servers in order to maintain your level of customer service.

 

 

A Good Business Spring Cleaning

Spring cleaning is not solely for homes! For any type of physical location whether that’s a retail space, a restaurant, a salon, or even an office, a good clean goes a long way for both your customers and staff. If you have additional outdoor space that you use in the warmer months like a patio, be sure to do a thorough assessment to make sure it hasn’t sustained any damages during the winter. Then make any necessary repairs and give it a thorough cleaning. Same goes for any speciality signage that you put out during the warmer months.

Additionally make sure your business operations are in order, whether that’s your bookkeeping, payroll system, or banking. Go through your inventory (and stock room if you have one) and make sure your employees are equipped with what they need to properly do their jobs.

Dust Off Those Virtual Cobwebs

Don’t be fooled: spring cleaning is not only reserved for physical spaces, it also applies to your digital spaces. Consider an audit of the programs you’re using to run your business. Do they still serve you well, or is it time to consider making a change? Plus are you offering a variety of payment options in-store and online to properly meet your customers needs and expectations? And don’t forget to clean your hardware: monitors and computers have a habit of collecting dust inside and can lead to overheating as the temperature rises.

The same goes for your digital presence whether that’s your website or social media profiles. If you are looking to ramp up business, an appealing online presence is a must. Even if you don’t consider yourself technologically savvy, there are a variety of simple tools to help you create a website if you don’t already have one. If you have a website that shows signs of virtual cobwebs, don’t brush this issue under the rug. A bad website is equally if not more damaging than not having a website at all! Why? Because first impressions matter, and that often happens online.

A great place to start is to search your business online and see what comes up. Also ask a few trusted employees, friends, or family members to assess your online presence. Have them look over your website and social media profiles and give you feedback and then consider updates or a refresh as necessary.

 

 

Marketing - Make the Most of the Warmer Weather

Having recovered from the holiday season, and after having endured a long cold winter, give your customers another reason to be excited about spring: your business! This can mean a variety of things, whether it’s a special spring promotion, offering a new or limited edition product, service, or menu, or simply coming up with a strategy to ramp up your marketing efforts.

Regardless of your business type, think of ways you can promote spring’s arrival: if you’re a salon owner for example, celebrate that it’s no longer hat-hair season, if you’re a restaurant owner perhaps a special season dish featuring an in-season vegetable. Additionally check if there are any special calendar days of the year that your business can capitalize on such as a 4/20 promotion for cannabis businesses.

During the warmer months not only do people want to make the most of the weather, there are also additional opportunities to take advantage of. Depending on your type of business, research any upcoming local events that your business can either participate in such as festivals or fairs, or look to drum up business by sponsoring this type of event.

Achieving Longer Term Goals

With the arrival of Spring, summer’s arrival is just around the corner. That being said, businesses should not only plan season-to-season, but have a longer term strategy in mind. In addition to the tips already mentioned, think about what your goals are for six months, or one year from now.

Looking ahead, maybe you’ve been dreaming about building a new patio for your restaurant, or expanding your operation and opening a new location. Before you’re in the full swing of summer business, now is the perfect time to check off those business goals of yours.

 

Planning Starts Today

Whether it’s to help purchase inventory or equipment, invest in marketing, take on a renovation, build a new patio, or even open another location, no matter the industry Merchant Growth is here to help fund Canadian small businesses. With a variety of funding options available get in touch with us and we’ll help you find the right option for you and your business.

Businesses need capital to expand. Very often, the fastest way to achieve growth is to borrow the necessary capital, as opposed to saving it up over a longer period of time. This usually means approaching a bank or other financial institution for a loan.

As a business owner, you may be worried about how your poor personal credit score will affect the chances of you securing that business loan. While it’s true that bad credit business loans can sometimes be hard to come by, it’s not always the case.

In fact, a bad credit business loan can be much easier to receive than you think! Whether you plan on going to a bank or an institution that is specifically designed to provide financing for small business, there are certain things you can do to improve your chances of getting the money you need.

 

Business Loan Fundamentals

When banks, credit unions or other financial institutions vet potential borrowers, there are a number of important factors they use to determine the risk involved in offering a small business loan. A personal credit score is only one of them. The factors banks are interested in include:

Understanding your specific small business needs

Every small business is unique, and so are their needs. The chances of small business owners receiving a loan is more likely if a lender is able to clearly comprehend how your business works, and imagine how it will grow in the short, medium, and long term.

The specific project you need the loan for

Small business loans are available in a variety of different forms. The ability to secure a loan will vary along with your requirements. Do you need to buy two small vans to deliver more orders to your customers? Or do you need to finance the construction of a 3,000-foot office space? Broadly speaking, lending requirements increase along with the amount of funding requested.

Your personal credit score

Personal credit scores can be important in some cases, but your personal credit history or business credit is generally not the only deciding factor, just part of the overall assessment. Start by understanding your credit score, and the reasons for your current ranking. Then consider how you can build back up your personal credit.

Your business credit score

Understand that in addition to your personal credit score, your business has its own credit score which is separate from personal credit and has a distinct rating system. Some of the factors that contribute to business credit are payment history, cash flow, net worth, and more.

The health of your small business

A growing business that has a strong business plan and excellent prospects is an attractive borrower whether from a bank or other financial institution’s perspective.

As you might expect, the health of your small business is very often the most important factor, not your bad credit score. Getting a loan with bad credit is within your reach!

What is Considered a Bad Credit Score?

Different lenders have different evaluation metrics, but generally speaking, credit scores fall within the following ranges. However, as always, remember that credit scores (whether a business credit score or a personal credit score) are not the only thing lenders care about.

• Excellent (720 - 850)
• Good (670 - 719)
• Fair (620 - 669)
• Poor (500 - 619)
• Bad (000 - 500)

With an ‘Excellent’ or ‘Good’ score, banks consider you a low risk borrower and provide attractive lending options. As you enter the ‘Fair category’ or below, you are considered higher and higher risk. Additionally, the lower your score, the higher the interest rate generally is from banks.

 

What Happens If I Need Business Financing But Have a Poor Credit Score?

As we mentioned above, it’s not the end of the world if you need to find a business loan with bad personal credit. However, you will likely encounter a number of consequences. Bad credit borrowers are, for example, generally end up paying a higher interest rate on the loan.

Additionally, you’ll likely have to wait longer for your small business loans when dealing with a bank. A bad credit score will slow down the process, as the bank will be interested in taking an extra close look at all the details before providing loan approval.

Banks Are Not the Only Answer

Not every small business lender is a bank, and not all borrowers need banks to find the financing they need. Alternative sources of financing can be of great value, and many of those alternative lenders don’t have minimum credit score requirements.

Merchant Cash Advance

Some companies are ideal candidates to receive merchant cash advances. Merchant cash advances use a business’ sales history as the basis for the loan, and once the money is advanced, loan payments are deducted from the company’s sales on a daily or weekly basis, whichever makes the most sense.

E-Commerce Financing

These are ideal for (you guessed it) E-comm sites that rely on credit card sales. E-commerce financing turns a business’ cash flow into immediate working capital that can be used right away. The money can be spent on online ads, to hire staff, to purchase inventory - whatever the business needs. Online lenders like Merchant Growth are great for this particular niche, offering loans of between $5,000 and $500,000. The best part? The loans can be approved in as little as 24 hours!

Line of Credit

Business credit cards can be valuable tools in some cases. However, the interest rate on a business credit card can be troublesome if money suddenly becomes tight due to unforeseen circumstances. The value of a business line of credit is that money can be borrowed, repaid, and borrowed again - all within the context of a more favorable interest rate.

 

The Value of Merchant Cash / Business Cash Advances

The decision to offer this type of financing is mostly based on sales volume, sales history and sales projections, so having a minimum personal credit score is not usually a factor to worry about.

By satisfying a number of prerequisites (such as the amount of time in business and minimum monthly revenue numbers), small businesses in Canada can find alternative financiers like Merchant Growth to be the best option for their needs - even more so than banks!

Because banks are so risk averse, and because the cost of vetting clients is the same whether they need a loan of $25,000 or $250,000, they often reject smaller applicants out of hand.

Fortunately, companies like Merchant Growth are happy to provide business lending options to any small business owner. With a focus on customer care, complete transparency, and efficiency, Merchant Growth uses the latest technology to connect with, vet, and lend to small businesses across Canada with financing from $5,000 and $500,000.

Want to learn more? Contact Merchant Growth today!