Merchant Capital Loan

The Indian economy is driven by several small and medium enterprises which give it the requisite boost and growth. These Micro Small and Medium Enterprises (MSMEs) along with other businesses in different sectors make the economy of the nation stronger and dynamic. The employment opportunities which these private self-funded businesses offer is also tremendous. However, these businesses face the shortage of funds which hampers their growth. Merchant Capital Loan comes handy during such times.

Till a few years ago, these small businesses or merchants had limited options to raise funds. They could raise funds from friends and family, however, it came at its own risk and could spoil relations. The other option was to raise funds from the local lenders which were a challenge as they asked for an astronomical interest rate and any delay would be shattering for the business. The only logical option was that of traditional lenders who although did offer the merchant capital loan but asked for collaterals and since most small businesses run on a rented or leased premise it became a challenge for them. Also, the fact that the traditional lenders needed multiple documents, branch visits and took a long time became a show stopper for the small merchants.  

With technology getting advanced, merchants have slowly turned towards the cashless transactions. Customers are comfortable in swiping their cards at the retail store or restaurants instead of giving out the cash. With the convenience factor attached, point-of-sale machines are being employed by various businesses. They also offer a great source of availing merchant capital loan or working capital finance to fund the business. These merchant capital loans are offered by the new age lenders and LoansJagat enables every merchant to get access to the merchant capital loans.

Merchant capital loan is a tailor-made business loan wherein the lender gives an advance sum to the borrower. This one time fixed sum can be used to meet the financial needs of the businesses. Unlike normal business loans where the loan amount is paid in monthly instalments, in merchant capital loan, the amount is repaid in small deductions from the transactions carried out using the credit or debit cards. Thus merchant capital loan is a big-time saviour for small businesses who require cash in hand for growth and expansion or for meeting their daily financial needs like paying for salaries, stocking inventory, marketing etc.

Merchant capital Loan is a boon for small business owners who don’t meet up with the eligibility needs of the business loan. The processing of merchant capital loan is simple with minimal documentation process involved. Herein, the borrower gets an advance sum from the lender which he can use to meet his financial requirements. The borrower can repay back the loan amount on a small daily basis wherein the small amount is deducted from his card revenues.

FEATURES OF MERCHANT CAPITAL LOAN

• Good credit: One can avail a credit of up to Rs. 1 crore with merchant capital loan. This, however, is dependent upon your monthly card transactions.
• Loan Tenure: These loans are highly flexible in nature and one can avail them for 6-12 months of tenure.
• Loan Amount: With merchant capital loan, the loan amount is dependent upon your card swipes. Higher the card swipe settlements higher will be the loan amount which can be availed.
• Easy application process: The process of applying for merchant capital loan is quick with the filling of application loan taking only a few minutes.
• Fast disbursal: Since these loans do not demand any stringent eligibility criteria like a good credit score or net income proof, these loans are disbursed in your accounts quickly.

 ELIGIBILITY CRITERIA FOR MERCHANT CAPITAL LOAN

Merchant capital loans are bounded by simple eligibility criteria which include:

• Business operation age of minimum 1 year
• Turnover of minimum ₹20,00,000
• Card acceptance vintage of a minimum of 6 months
• Minimum monthly card volume of ₹5,00,000
• Minimum of six settlements per month

DOCUMENTS REQUIRED

The applicant needs to attach the copy of following documents along with the application form. Though these requirements may differ from lender to lender.

• Bank statement of your current account for the past 12 months
• VAT returns of last 6 months
• Card settlement statements of last 3 months.
• KYC documents of self and promoter.

BENEFITS OF MERCHANT CAPITAL LOAN

• Quick access to funds: Unlike regular business loans which take the time of some weeks or even months for getting processed, merchant capital loan is disbursed quickly in a span of some business days.
• Minimal processing time and documentation:  Usually business loans encompass lengthy documentation and processing time. With merchant capital loans, not much of documentation is required and the loan is processed quickly too.
• A high credit score is not a necessity: Unlike business loans which seek a good credit score of the applicant, merchant capital loans only rely on credit/debit card sales transactions.
• Collateral not required: This loan is provided without any collateral to back the loan.
• Easy Repayments: Since these loans involve automatic deduction of a small amount from your daily debit and credit card transactions, the borrower need not be bothered about any monthly instalments.

CHOOSING THE RIGHT LENDER

LoansJagat enables the best Merchant capital loans. The online portal allows for easy application processing and quick disbursal of funds. Thus, these loans are the best funding options for small and medium enterprises who wish to expand and grow their business. The merchants need to fill a simple online application form post which LoansJagat provides the loan options from over 40 lenders including top Banks and NBFCs. The merchants can then choose the best lender based upon the features and terms offered. LoansJagat also provides a dedicated loan relationship manager to help merchants access their loans faster. Apply for merchant capital loan with LoansJagat now and get the best loan for your business.