fast approvals for business funding
Pile of merchant cash

Getting A Quick Financing For Your Timeshare Industry

A Timeshare Company has multiple shareholders with each shareholder having the ownership or use right for a certain period of time every year, which remains almost the same every year. It is also called as Vacation Ownership as the property may be taken by the shareholders on partial ownership, lease or rental or just has the right to use without any ownership claim. works closely with all of the well known merchant service providers who service and work with companies in the timeshare industry like EMS.

Apart from using in their allotted time, the owners can give out the property on rent during this time, give it as a donation or gift, exchange it with other shareholders or with some other unrelated group and in rare cases, can be sold through online real estate medium, brokers or other means. Some good examples are holiday resorts, restaurants, travels etc.

Garnering financing help for merchants with bad credit score

Every business, small or big, startup or profitable needs to expand in order to achieve higher growth rates, increase market share and beat the competitors. The main driving force behind all such plans is credit or financial resources. Getting aid from a dependable credit provider is the key to expanding the business.

The first method of getting business financing is, of course, trying to obtain a bank loan. Business loans from banks are often high amounts at comparatively lower rates of interest, but they may take months to get approved. Also, the repayment of bank loans has to be made in Equated Monthly Installments or EMIs, which require a minimum pay every month irrespective of the company’s cash flow. Another hurdle created by banks is the credit score. If you have a history of loan default or pending loans, have a poor record of repayments, high NSFs (Not Sufficient Funds) or low income, banks reduce your eligibility, depending on which you may get a small loan amount or no loan at all.

Merchant Cash Advance

So finding a reliable credit source becomes difficult in such cases, and one of the good bank loan alternatives is to get a MCA (Merchant Cash Advance). Companies giving such services similar to unsecured bank loans charge very high-interest rates but have a flexible repayment system and quick approval of credit. The company providing the merchant account will integrate its account with the merchant’s credit accounts and take over a portion; usually, a major share of the latter’s cash inflows till their advance amount is repaid. In this way, the merchant is relieved from a monthly compulsory minimum amount to be paid to the lender.

If the startup company applying for credit has a bad credit score, the lender may categorize it as high risk or low risk. A timeshare company is likely to be categorized as high-risk business type. This is because, timeshare businesses can easily transfer temporary ownership rights, and there is a high rate of owner dissatisfaction. Companies under vacation ownership are difficult to sell and may have high chargebacks.

The high-risk merchant account providers may charge higher fees, but they provide extra features such as

  • Online payment methods

  • Internet marketing tools

  • Web design

  • Transparent pricing and loan terms

  • Anti-fraud IP filtering

  • Offshore processors

  • Multi-currency support

  • SEO assistance

  • Chargeback management system for solving disputes and

  • Quality customer support so that the borrower gets all the help to increase its cash flow. Many high-risk processors customize their service prices according to the type of the merchant’s business and allow canceling service without charging penalty.

When do you really need a merchant cash advance?

  • You want a quick credit, without the long delays that bank loans take.

  • You are looking for a flexible repay scheme depending on your fluctuating sales, without any monthly minimum amount.

  • You accept credit card payments from your customers and POS forms a large percentage of your income source.

  • You are planning to purchase an inventory or infrastructure element for your business.

  • You wish to make your advertisement and promotion campaign larger and improve cash flow.

  • Thinking of increasing the man count by hiring more employees.

  • Looking for an opportunity to expand your business either in new product segment or new territory or preparing for carrying out renovations.

Manage position to secure additional financing

A company, particularly if it is a start-up, may require additional financing even before paying off the existing first business cash advance from one lender. Instead of going straight away for a second lender, try for alternative funding solutions like business funding from banks or making a lender buy out the first cash advance or refinance or consolidate the advances, thus making the merchant pay to a single lender.

It is a usual practice that the first company lending merchant cash advance to a merchant enjoys more right to claim on the latter’s assets. So if the merchant requires the second financing, the next lender should be willing to take another position, 2nd position in this case, where the second lender’s claim will be subordinate to the first lender’s position. Lenders do agree to take subordinate claims, even 3rd, 4th or 5th positions and provide BCA (Business Cash Advance), may be for a higher fee and shorter terms. Therefore, it is with the merchant to select the best contract suiting its business, which becomes trickier with timeshare companies.