What are the Benefits of a Merchant Cash Advance?

The Benefits of a Merchant Cash Advance:

1. It’s Flexible.

With a Merchant Cash Advance, you only pay back the money when you’re earning it, which means that as long as customers are paying with debit/credit, these are the only times that payments are taken. Although payments are taken daily (instead of the larger payments loans require each week or month), the percentage that your lender recovers align with your sales, so if you know you’ll still have a good amount of capital during the slower months. 

2. It’s Easier to Apply.

There are usually no extensive credit checks or lengthy approval processes for a Merchant Cash Advance, therefore, if you’re in a cash crunch and need capital quickly to keep your business afloat, a cash advance is a much more suitable option. 

3. You’re More Likely To Be Approved if You Have Bad Credit.

If you’re relatively new to the business scene or have a bad credit rating, it doesn’t automatically mean you’re ineligible for a Merchant Cash Advance. In fact, you’re more likely to be approved through a simple online process that includes you providing proof that your business reaches a particular amount of credit/debit sales each month. Instead of showing a history of good payments, you’re required to show that these payments will continue for the foreseeable future.

4. There are Fewer Limitations To How You Can Use The Funds

Where major banks often require a set plan on how you expect to spend the money or provide strict limitations on what you can spend it on (for example, there are many who restrict their funds to be used to pay off debt), a merchant cash advance can be used for almost anything. Whether you need it to pay off your accounts payable or to even supplement your personal bank account until the next season, these institutions don’t care what you use the money for as long as you can prove that you have the resources to pay it back.

5. There’s Very Little RIsk.

When you apply for a business loan, you’ll most likely be required to sign over some of your assets as collateral in the event that you can’t pay. And, your credit rating will also be put on the line in these situations as well. A Merchant Cash Advance doesn’t have fixed fees; you only pay a percentage of your debit/credit sales, which means there are no penalties for non-payments because the payment is automatically withdrawn through the partnership you’ve created. 

Small businesses are often stuck in a loop of requiring more capital or cash flow in order to grow their business yet most banks and financial institutions won’t approve loans without capital, assets, and lengthy credit history. If you’re in this situation, there are options for you to obtain the financing and funds you require to meet your needs. Before giving up, look into a Merchant Cash Advance to find out if its right for your business. 

To learn more about Merchant Cash Advances, reach out to a member of our team today. Or, read our blog Business Cash Advances vs. Business Loans: Which One is Best For My Business? Here.