Some believe that a merchant cash advance is just another type of loan – but it’s not a loan at all. It’s actually a much more flexible funding option for businesses of all sizes. If you are a business owner who wants a fast, easy, and affordable way to access business capital, read on to learn more about this valuable tool.
1. Who Can Benefit From a Cash Advance?
Unlike traditional loans, merchant cash advances provide access to capital quickly because of their swift application and approval processes. Some companies that can benefit from a cash advances are those that:
- Have an emergency or unexpected opportunity (such as an equipment, inventory, or advertising purchases) that requires fast funding
- Want to make an investment that will directly enhance their business (such as a new location)
- Have little or no credit history
- Have credit history that doesn’t meet traditional loan requirements
These characteristics make cash advances a great choice for restaurants, auto-repair shops, retailors, among others.
2. How is the Funding Re-Paid?
Forget about invoices and a regular payment that can put a strain on your business. A cash advance works in a much different way.
Instead, a percentage is taken directly from the recipient’s credit card sales. Thus, if your sales decrease, so does your payment. Add to this the convenient, automatic nature of a cash advance, and it’s easy to see how simple and dynamic they can be.
3. Can I Receive a Cash Advance If I’ve Been Turned Down By Banks?
Institutions like Sterling Funding work with businesses that have been turned down by traditional lenders. Unlike banks, merchant cash advance funding partners offer greater flexibility in providing a cash advance by weighing your eligibility on things like monthly income instead of credit score.
4. Can a Merchant Cash Advance Help With Growth, or is it Best For Tough Times?
This is part of the beauty of a merchant cash advance – it works well for both situations.
You can certainly use a cash advance to get much-needed relief to rebound from a tough time for your business. But, if you simply need funding to take that next step, such as a location expansion or an equipment enhancement, a merchant cash advance can help you stimulate growth.
5. How Do I Receive a Merchant Cash Advance?
If you are interested in a merchant cash advance, find a funding partner that works with you to ensure that your project will bring a healthy ROI. The company that you work with should be consultative, and should offer easy-to-understand application and approval processes. Once you’ve located a funding partner, simply apply for your funds, and get ready to watch your business grow!