Advantages of a Merchant Cash Advance

Advantages of a Merchant Cash Advance

Those who own businesses realize that cash is king. If they do not have adequate funding to meet basic expenses, such as payroll or overhead, they might have no choice but to downsize their businesses or close their doors. Sometimes, businesses grow so quickly that their current capital cannot keep up with all the changes.

Not all businesses receive approval for traditional bank loans, and if they do, the process may take weeks. Banking regulations require those seeking funding to fill out detailed paperwork and undergo rigorous credit checks. Lenders might also require collateral, such as machinery or buildings. Those approved for traditional bank loans may discover that the funding they been given is inadequate. In addition, they have a loan to repay. Both the loan and interest will appear on the business’ balance sheet as a negative.

Are there alternative small business loans? Yes, there is! A business cash advance can help businesses that are struggling with cash flow.

For example, retailers may be able to save a significant amount of money if they buy inventory in bulk. If they are unable to do so, they may have to pay more to stock their shelves. Since they are required to remain competitive, paying more for inventory means a cut into their profits. A merchant cash advance enables businesses to save on quantity discounts in order to remain in the game.

Many people run seasonal businesses, which means they bring in little or no income during certain times of the year. Others may have poor credit or they already may be carrying an uncomfortable amount of debt.

A business cash advance is a great fit for merchants, because it does not require collateral. Those who opt for the traditional bank loan route often risk losing equipment if they default on their loans. Additionally, applying is a simple process, because most merchant cash advance providers have two basic requirements: time in business and the monthly amount of credit card receipts.

Business cash advances usually offer approval in a week or less, which is much quicker than the traditional lender route. In addition, those who qualify can receive their cash fast. This is perfect for those who wish to take advantage of an unforeseen opportunity. These types of cash advances are excellent alternative small business loans, because payments are revenue-based, meaning that they depend upon the amount of revenue a business brings in through its credit cards. Payments may be adjusted based upon seasonal issues as well.

Merchant cash advances offer the flexibility that traditional lenders are unable to provide.