Solve Your Cash Flow Woes With Merchant Cash Advance
If you’re a business owner who needs cash quickly, it can seem like there are few places to turn. Going for a traditional business loan can take weeks or months, and if you’re in a tight spot you often don’t have that kind of time to spare. If you’re in need of cash right now to keep your business afloat, look no further than a merchant cash advance.
What is a Merchant Cash Advance?
This kind of loan isn’t really a loan at all. It operates differently. While with a traditional loan you are given a certain sum of money and then a certain amount of time to pay back that sum with interest, this sort of “loan” trades a certain sum of money for a piece of future sales.
Generally speaking, merchant cash advances are given to companies that rely heavily on credit or debit card sales, such as restaurants. (This is not true 100% of the time, but it is the most common case.) Thus, the most common kind of advance is where the business is given an upfront bit of cash, and this is repaid through weekly or daily debits from the business’ ACH account.
There are many advantages to getting an advance rather than a traditional loan:
They are unsecured. Depending on the kind of advance you get, you may not need to put anything on the line to get money for your business. With this sort of advance, if it is structured favorably toward the borrower, if the business goes out of business the lending institution is out of luck. It’s important to read on the dotted line carefully, though, as some advances do require some sort of guarantee.
They are quick. Again, time is often of the essence when it comes to business. A merchant cash advance is far quicker than many other traditional routes of securing capital for businesses.
When sales go low, your repayment level is low. Since these advances are often paid back as a percentage of your profit, if your profits aren’t doing so well that day/week, your payment will be lower as well.
There are several reasons to take a look at this sort of advance for your business. If you are in a tight spot and need a few thousand dollars to help your business make it to the next big waterfall, then this sort of merchant advance may be very helpful for you.