Why Merchant Cash Advance Will Work for You

Why Merchant Cash Advance Will Work for You

You’re not alone if you struggle to maintain positive cash flow for your small business all year long. Emergency expenses or a slow season can sometimes be all it takes to leave a company without enough revenue to pay its bills. A merchant cash advance can come in handy in this situation. You receive a lump sum of cash from the lender and pay back a daily or weekly percentage based on credit card transactions. This allows you to pay more on your loan when revenue is high and less when it’s lower.

Other Benefits of a Merchant Cash Advance

Small business owners with big variations in revenue appreciate the merchant cash advance most for its flexibility. If you run an ice cream stand, for example, you won’t have the same level of funds available to make a loan payment in the winter than you would during the summer.

The ability to receive the funds promptly is another big benefit. You could even have the money in less than a week depending on the lender’s requirements and processing time. This is far preferable for a lot of small business owners than waiting weeks or months for a bank to approve a business loan with a set payment amount.

Obtaining a merchant cash advance requires little paperwork beyond the application. Requirements are typically much looser since the lender has direct access to a percentage of your profits and doesn’t have to worry about late or missing payments. You should not have to offer any form of collateral to receive a merchant cash advance since a percentage of your cash register receipts guarantee repayment for you.

We don’t recommend using a merchant cash advance multiple times since the interest rate is higher than standard bank loans or business credit cards. However, it makes an excellent alternative for new business owners with little credit or collateral to offer or who can’t meet a bank’s strict loan criteria. Please contact our finance company today to learn more about this financing option or to request a loan application.