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Business Financing Comparison: Merchant Cash, Banks, HELOC

As the Big Dance continues for financing today, Banks faced off against Friends & Family. Both teams are known for always being there for you, but this game tested how long each can really last.

 

Analysis:

 

Banks brought the paperwork strategy, but Friends & Family quickly dismantled it by offering cash to small businesses under the table. As (familial) tensions heated up though, Friends & Family struggled to keep things - well - friendly on the court.

 

Friends’ & Family’s unofficial loans, though quick to be offered, dried up just as quickly. The strategy couldn’t outlast Banks’ dependability and longer terms.

 

Nice and steady, nice and slow won the game today.

 

Banks: 62

Friends & Family: 55

 

In the second game of the day, Home Equity Lines of Credit (HELOC) met Merchant Cash Advances in a tight battle.

 

Analysis:

 

Both teams brought their greatest strengths to the court - fast, easy loans - and tried to keep their weaknesses - fluctuating interest rates and fees - sidelined to the bench.

 

HELOC shot ahead early in the first quarter offering extensive lines of credit backed by the equity in business owners’ homes. Appealing in the long game as these loans were, Merchant Cash Advances fought back with how easily business owners can qualify for loans. Yet fees ultimately led to the demise of Merchant Cash Advances in the end. They unexpectedly took over in the second half, and there was simply no coming back.

 

HELOC: 68

Merchant Cash Advances: 57