How Merchant Cash Advances Benefit Small Business Owners


Merchant cash advances are a good alternative to traditional business funding methods. For small business owners who have an immediate need for cash, merchant cash advances allow them to secure capital against the receivables of their business. More simply, the merchant cash loan is provided on the basis of future credit card sales. To get approved, lenders may inspect the business revenues to gauge the potential cash flow in your company.

Of course, merchant advances help maintain cash flow without the need for post office currency, an extremely important metric for small and medium sized business owners. However, traditional financial institutions like banks have become very stringent on lending criteria. As a result, getting credit on short notice is tough. For small business owners who have experienced this problem, merchant cash advances offer several benefits.

Get Cash Faster Than Before

One of the biggest advantages of getting merchant cash advances, they help small business owners get money faster. You can get access to cash quicker than you can find out what your tax ID number is. As a small business owner, you may need money for paying vendors, restocking or updating the inventory and growing the business. But, getting a loan from banks can take months in some cases. Alternatively, merchant cash advances can be delivered within just few hours of applying online. With faster access to cash, the company’s cash flow is maintained. More importantly, you can proceed with paying suppliers and fulfilling other financial obligations.

Avoid Credit Score Damage

Another great advantage of opting for merchant cash advances is the low impact on business credit ratings. In fact, a merchant advance does not require any additional credit on your credit ratings. When you take a commercial loan it shows up in your credit report. A merchant cash advance is a sales transaction. Therefore, it will not affect your credit score the way a traditional bank loan will. The merchants who offer cash advances get their money back from the future sales of your business. This safeguards their investment from traditional loan defaults while protecting your business credit ratings.

Regain Focus

A merchant cash advance in a time of need can help a business owner focus on more important operations. There is a reason you never worried about how difficult the CPA exam is. You are a business man, not an accountant. Your time is much better spent servicing customers, generating leads or managing operations than worrying about how you are going to make ends meet. When your business has financial problems, things can devolve quickly. When you get a cash advance, you have more time to focus on the processes that will help turn business around.

Apply Without A Hassle

Moreover, merchant cash advance involves minimum paperwork to receive your required cash. To secure funding, you can apply for merchant cash advances online. They do not require any physical paperwork to be filled or submitted. Additionally, you are not required to fax, mail or scan tons of documents. Generally, commercial banks check tax returns, business plans, financial reports and credit reports before considering you as an eligible candidate for a business loan. On the other hand, cash advance merchants only check essentials like your credit card receipts and cash flow report. The overall convenient application and review process makes funding much easier on business owners.

Bad Credit Is Accepted

Merchant cash advances can be a great option for someone with bad credit. If you are in a real pinch for cash, they can offer the extra capital needed by your business. Since they do not look at your credit score as rigorously as a traditional bank loan. Being an alternative lending option for bad credit, you can use a merchant cash advance when personal banks and credit cards may decline you.

Pay Lenders When You Get Paid

Last but not the least, merchant cash advances get paid when you do. If you apply for a traditional business loan, you will have to pay a fixed sum back every month, regardless of the financial situation of your business. However, the collection amount for merchant cash advances  varies according to the sales volume of your business. This collection method ensures that  cash advance merchants get paid when you make sufficient sales.

Merchant cash advances offer a faster and easier solution to small business owners who urgently secure money for their business. Whether you are growing a business or reducing business debt, merchant advances can help get cash within one or two business days. If used effectively, merchant cash advances can be a reliable method for a quick and safe cash infusion into your business.

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One comment

  1. Agreed with above mentioned points that Cash Advance you can get faster but business owners needs to be smart to get cash advance in enough numbers. They have to pitch business plan accurately if they are new to the industry and should have vast knowledge about competitive market.

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