Last post: Sep 2, 2019
While poring over your options for business finance, you may have heard of ‘PDQ cash loans’ or a similar term, and wondered what these are, and whether they could help your company. The acronym PDQ stands for ‘Process Cash Quickly’, with ‘PDQ machine’ simply being another name for a card machine, as are widely used by businesses for the quick and convenient processing of card payments. However, you may not have realised that your own firm’s PDQ machines could help to unlock a form of business finance lacking many of the disadvantages associated with traditional bank loans.
So, what is a PDQ cash loan?
'PDQ cash loan' is another name for a credit card machine loan, merchant cash advance or business cash advance, to give just some examples of the terms used in reference to this innovative and only relatively recently popularised type of business finance.
We call PDQ loans merchant cash advances here at Choice Business Loans, and strictly speaking, they aren't actually loans at all. What they instead involve you doing, is selling a proportion of your future card takings for a fixed price today.
The way it works is very simple. You arrange the cash advance and receive the money, which you can then spend on whatever your business needs, as long as it is legal. You will then pay back the advance, bit by bit, with every transaction processed through your company's PDQ machines, equating to a pre-agreed percentage – usually between 10% and 15% of all card receipts. This continues until the advance, plus a fee, has been entirely paid off.
If a traditional loan won't work for you, consider a merchant cash advance
There are understandable reasons why many businesses are wary of requesting a traditional bank loan when they are in need of an injection of cash. Your business may be seasonal, for example, meaning that you'd rather avoid a situation of being forced to pay a certain minimum amount each month, regardless of how much money your firm actually makes that month.
Well, a merchant cash advance can be brilliant for a company in that situation, as the aforementioned percentage arrangement for repayments, directly linked to card sales, means you'll pay back less during quieter months for your business, and more during brisk periods of sales.
It's no surprise, then, that despite merchant cash advances also not having a deadline for repayment – which is another definite advantage of seeking one over a traditional bank loan – this type of finance tends to be paid off by the borrowing business in about six to nine months.
Another reason you might not intend to seek a traditional loan is if your business has an adverse credit history that would make obtaining this type of finance difficult or impossible.
Again, a PDQ cash loan allows you to sidestep the issue of bad credit, because it simply isn't as relevant, given the way a merchant cash advance works. With repayments being taken directly and automatically from card sales in a pre-agreed fashion, advance providers don't tend to be as concerned about poor credit histories as traditional business lenders.
Oh, and as these advances are also a form of unsecured business finance, there's no need for you to put any assets on the line as security.
This business finance solution isn't for everyone, however
So, a PDQ cash loan could work for a lot of different businesses, and it's such a convenient type of business finance that you won't even need to switch from your current PDQ card processor. There are, though, some caveats we ought to share.
There is, first of all, a limit to how much you can borrow with a PDQ cash loan – the typical 'ceiling' being your firm's proven average monthly turnover, although this could still enable you to access as much as £500,000 in much-needed funding.
That word 'proven' is also an important one if you're interested in a merchant cash advance through Choice Business Loans; your business will need to have been taking card payments for at least six months to be eligible. This rules out a PDQ cash loan as an option for start-up businesses that lack such card payment history.
Naturally, this requirement also renders a merchant cash advance unavailable as a form of business finance for companies that don't take card payments at all. If this describes your firm, we'd urge you to give the Choice Business Loans team a call today on 01494 410 125, as we could discuss arranging a revenue advance – which is based on sales – or short-term unsecured business loan for you instead.
Don't be afraid to ask our experts for assistance and guidance
Whatever your own business's present financial situation, we are here to talk to you about your needs, so that you can be sure of taking advantage of the solution that represents the best match to the particular circumstances and ambitions of your company.
Don't forget that you can also get in touch with us online, using our straightforward contact form.
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