If you’re a small business owner, you are probably more than familiar with the need for immediate capital. This need is quickly accompanied with the question of where to find the quick cash you need to keep things running smoothly. In this situation, you might think a merchant cash advance looks like a good deal.
Before you submit that application and get the ball rolling, consider the following signs your business could benefit from a merchant cash advance – and if it’s the right choice for your business.
How a Merchant Account Works
Historically, a merchant cash advance has been for businesses whose revenue comes primarily from credit and debit card sales (e.g. retail and restaurant). Now, merchant cash advances are available for all types of businesses, including those that traditional lenders consider to be “too risky”. Examples of businesses considered high-risk include: construction, hotel and motel, travel, furniture, nutraceutical, ecommerce, tech support, gaming, electronics, credit repair, airlines, telecommunications, warranties, and many more.
Not a loan, a merchant cash advance is a simply a sale. Your business is essentially selling its future credit and debit card sales at a discount in exchange for a cash advance. With a leading merchant account provider, you will also be able to secure a flexible collections process.
Signs Your Business Needs a Cash Advance
- Your business needs flexible funding. Rather than making a fixed payment every month from your bank account over a set repayment period, a cash advance allows you to make daily or even weekly payments until the advance is paid in full. These flexible payments ensure your business can pay back more when business is good, and less when business is slow.
- You’re struggling to find a traditional lending source. If you have poor or no credit, it can be difficult, if not impossible, to secure the capital you need. A merchant cash advance is known for being a great solution for those with less than stellar credit. You can secure the quick cash you need and work on rebuilding your credit at the same time.
- You’re having trouble covering day-to-day costs. Has it been difficult to put together enough cash for payroll? Do you need to purchase new equipment or make repairs? Has an unexpected opportunity come up? A cash advance can help you cover costs, seize opportunities and operate smoothly.
Worried about the many questions surrounding a merchant cash advance? Never fear. Merchant cash advance regulation has come a long way. The key is to do your research and find a provider that specializes in working with your industry and business type.Author Bio: Electronic payments expert Blair Thomas is the co-founder of high-risk payment processing company eMerchantBroker. He’s just as passionate about his business as he is with traveling and spending time with his dog Cooper.
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