The Top 3 Reasons Companies Use Merchant Cash Advances
Operating a business today means staying ahead of the game, and your competition. Whether you’re a new business looking to grow through advertising or an established company seeking to remodel and upgrade, you’ll need a quick influx of capital. Applying for loans is a lengthy process, and seeking credit can offer hassles of its own. That’s where a merchant cash advance comes in; by getting you cash quickly, you have the flexibility to make your business a success.
When you’re looking to expand or your business is in crisis, getting capital fast is of the utmost importance. Waiting for loan approval and spending days conversing with banks means you’re losing money while you’re trying to raise it. A merchant cash advance offers the ability to get your hands on that cash quickly, allowing you to focus on making your business work. Usually only taking between two and five days for review, these options get you what you need when you need it. These loans are often most beneficial for those needing short-term loans as well, since the period of remuneration is usually between 12 and 24 months.
Unlike traditional loans, which rely on collateral, or a line of credit that has a fixed payment depending on the balance each month, MCA’s rely on a different form of repayment. Each credit transaction that occurs in your business counts towards paying back the advance. A certain percentage is taken and tied directly to your account, meaning payments are based on how successful your business is. Having a bad month no longer means scraping together funds to pay the bill; by relying on your sales volume, you know the payments are always sufficient.
Low Credit Woes
Business that are starting out or companies that have fallen on hard times are often faced with issues involving credit. Some don’t have enough, or others have faced issues that have lowered their credit score. Thankfully, merchant cash advance loans generally do not focus on credit scores, and are much more interested in your history with customers’ charge purchases. Since payment is based on credit transactions, institutions tend to worry less about your credit score. Companies that deal with clients that prepay or do a majority of their business via credit transactions will be at an additional advantage, since their history will prove much of their income comes from those purchases.
Any business, whether well established or newly formed, should look into a merchant cash advance when seeking additional capital. With a quick turnaround, getting capital in hand is fast and easy, letting you spend more time making your business a success.