If you were to ask any business owner what their number one concern is when running their businesses, 10 out of 10 would say working capital. Businesses across all industries and of all sizes often struggle with having enough cash on hand to operate their businesses without relying on the use of credit facilities. However, a merchant cash advance can provide an influx of cash without going into debt.
How it Works
For businesses that accept electronic payments at the point of sale, finding the money they need to take advantage of early payment discounts from vendors, sales on raw materials, or to bring on new customers is easy. Obtaining a cash advance is a quick process that requires you to complete a short application that includes basic information about your business and your monthly sales volume. Approval will occur anywhere from a few hours to a few days and a deposit will be made electronically into your business bank account. Repayment occurs through a settlement process whereby a portion of your daily electronic sales is withheld and forwarded to the advance provider until the balance and fees are paid in full. If you don’t have sales for the day, no payment is collected.
Benefits
A merchant cash advance is preferable to a traditional bank loan because it isn’t a loan product. Qualification is easy and doesn’t depend on your personal or business credit. Emphasis is placed on your ability to repay the advance through your sales volume. In addition, merchant cash advances are approved and funded much more quickly than bank loans and repayment occurs automatically, giving you the opportunity to focus on running your business rather than your money.
A merchant cash advance offers cash strapped businesses a way to tap into their future sales in order to fund their day to day business operations rather than depending on loans from financial institutions or friends.