Many small business owners know that bad credit and even bankruptcy do not necessarily mean a dead business. Customers can still be calling and coming through the door, even though the business is plagued by past problems such as unexpected calamities, difficult partnership dissolutions, or strategic plans gone awry.

Perhaps the small business simply doesn’t have enough capital to realize its potential and overcome its growing pains. Unfortunately, when it comes to getting small business bad credit loans, small business owners probably will not find many lenders willing to work with them as they face these challenges.

The good news for merchants in this frustrating position is that there is an alternative to traditional small business loans. Merchant cash advances allow small business merchants with bad credit to gain the capitalization they need by advancing cash based on future sales. Because this isn’t a traditional small business loan—it’s actually a sale of future credit card receipts—bad credit or bankruptcy isn’t a hindrance. In exchange for a percentage of their future credit card receipts, merchants receive the cash they need to expand, remodel, invest in equipment, purchase inventory, or otherwise invest in their business. They can even pay off other debt. Unlike many conventional small business loans, there are no restrictions on how the cash can be used.

Also, since this isn’t a traditional loan, personal guarantees or collateral aren’t required and the business suffers no loss in equity. Also, compared to traditional small business loans, there are significantly less hoops to jump through to gain approval. A provider of merchant cash advances will easily be able to figure out how much immediate cash a merchant qualifies for based on their average credit card sales volume data. Funds can be in a business account as early as the next day after approval.

Another advantage over conventional small business loans is that payments to the merchant cash advance provider are tied to sales volume, so if sales are low one month, so are the payments. This benefit takes a lot of the headache and risk out of managing cash flow.

Payments are structured by the merchant authorizing a credit card processing company to give a percentage of its daily credit card income directly to the merchant cash advance provider. There are no coupons or checks to write, freeing precious time for the day-to-day operations of the business. Merchants sometimes must shift to the cash advance provider’s preferred processor, but this is not always the case. When the debt obligation is met, the deductions stop.

In today’s tightened credit market, merchants with bad credit seeking small business loans may feel like they’re drowning with no one to throw them a rope. For these merchants, merchant cash advances can be the lifeline saving the business and leading to future prosperity.