In today’s business world, there are a great many more options for securing funding than in the old days when a bank loan might have been your only option. One of the new financial products available is a merchant cash advance, which is a process by which an alternative lender would purchase your future transactions, in exchange for an upfront sum of cash.
Instead of repaying a loan in fixed monthly payments, your business would have a monthly sum deducted from its credit card sales, until the upfront cash amount has been repaid.
Benefits of merchant cash advances
One of the first major benefits of a merchant cash advance is the fact that it is not a loan. That means you don’t have any collateral invested, since the credit card sales actually serve as collateral, and you will not lose any business assets. Another benefit is that you don’t need to have a perfect credit history to be approved for a merchant cash advance, since an alternative lender would be more concerned with the volume of your credit card sales.
Even though you have to pay back a sum of money each month, that sum is not fixed, and instead fluctuates along with your credit card sales. The big advantage to this is that if you have a couple slow months where sales are down, you would not still have to pay a relatively high loan payment during those months. That means you’ll never get behind on payments, because each monthly payment is always just a percentage of your credit card sales for the month.
One of the advantages which appeals most to businessmen is that applying for a merchant cash advance is fairly simple, and does not involve a ton of paperwork. Very often these transactions can be completed within two or three days, so if your business needs an immediate infusion of cash, that can be easily accomplished without having to go through a long, complicated process.
Would your business benefit by a merchant cash advance?
Merchant cash advances are not right for every business, but they do have some definite advantages for those businesses which are a good fit for them. Contact us at Avery James to find out if a merchant cash advance might benefit your company.