Business loans and lines of credit have become more difficult to get these days, so I’ve had to learn to help many businesses get creative. Businesses of all types, sizes and histories need credit to grow or to bridge a gap in their payment process. From the small business owner to the publicly reporting or traded business, all who have come my way lately are in the uncharted waters of change, and are being turned down for loans by the very financial institutions they’ve supported over the years. Where to go now?

Among the many alternative financial solutions I’ve been recommending is the merchant account loan. Think of it as a “bridge” loan at credit card rates-it’s expensive, but it’s a great way to bridge a short-term gap or pay for revenue-enhancing expansion. It’s basically an advance against future credit card earnings based on your last few months merchant account history. You apply for the loan by simply showing your merchant account statements and filling out a simple application. Your credit card history will determine how much the bank will be willing to lend-it’s that simple.

No collateral is required, and there are no personal guarantees. You don’t have to have spotless credit, just no open bankruptcies. You have to have been in business for at least two to three months, and be processing a minimum of a few thousand dollars a month in credit card sales. There’s no application fee. And best of all, the funds usually get to your business bank account in just a matter of days, up to $200,000 or more per location.

This loan is not meant to be long-term, not unless your projections show that your increased cash flow from the business expansion is significant enough to cover the higher interest rates. It’s convenient-you can borrow over and over if it makes sense, as in the case of phased expansion. So you can use the cash to purchase inventory or equipment, remodel or expand, open a new location, or advertise-again, as long as it makes sense, and usually without restrictions.

In order to get a loan against your merchant account, you may be required to change merchant account providers to one that offers such a loan; just be sure that if you switch, your merchant account fees will not increase, and ask if they cover other expenses such as any applicable cancellation fees for your previous account, and equipment.