5 Benefits of a Merchant Cash Advance for Your Business
The success and growth of your business rely on cash flow. You need funds to pay suppliers, pay your utility costs, maintain sufficient inventory, and take advantage of opportunities. Without enough money, your business can suffer.
A merchant cash advance provides small to medium-sized businesses with an alternative to traditional business loans. Whether you can’t qualify for a loan or you have a more immediate need, an MCA can provide you with extra working capital in little time at all. Let’s take a look at an MCA and a few of its benefits.
What’s a Merchant Cash Advance?
A merchant cash advance (MCA) isn’t technically a loan. It’s an advance on your future card sales. Upon approval, a company provides you with a lump sum. It then deducts a percentage of your daily card sales until you repay the entire amount borrowed plus applicable fees.
5 Benefits of a Merchant Cash Advance
Here are a few of the most significant benefits of an MCA:
- A simpler application process. Applications for merchant cash advances are fairly short, and you only need to provide a few documents. In most cases, you can complete the entire process online.
- Fast access to funds. Approval times for MCAs are much faster than those of conventional business loans. You can often get approved in a week or less and receive your funds shortly after.
- No collateral requirement. An MCA depends on your future sales, not your credit history. Additionally, it’s not a loan. You don’t need collateral to secure anything, which helps to protect your business assets.
- High odds of approval. MCAs have some of the highest approval ratings of any financing options available. As such, there’s very little chance you’ll get denied if you decide to apply.
- Sales-based repayment. With a conventional loan, you pay a set amount every month, regardless of how your business performs. That means even if your sales are down, you still owe the same payment as when business is booming. With an MCA, you pay a percentage of your card sales. In other words, if sales are up, you pay more. If they’re down, you pay less. That can make repaying your advance much less stressful.
Is a Merchant Cash Advance Right for You?
Business loans aren’t always the solution for businesses that need extra capital. Sometimes, an alternative like a merchant cash advance makes more sense. Look at your options carefully before deciding, and you’ll find the best solution for you.
