A Merchant Cash Advance Offers What Bank Loans Cannot

If you run a small business, realizing you don’t have the capital you need can be quite overwhelming. Many entrepreneurs who need money fast decide to obtain a merchant cash advance. This type of advance is preferable to traditional bank loans for many reasons.

Take Advantage of Opportunities

If your company’s busy time of the year is approaching, an MCA can help you to prepare. You can use the money to hire seasonal staff, stock up on extra inventory or lease extra equipment to get you through the season without customers feeling underwhelmed by your service.

Maintain Cash Flow

If you’ve been dreaming of expanding your business, a merchant cash advance may provide just the opportunity you need. Use the money from your advance to expand the business and keep your everyday capital to maintain your company’s daily operations. This is a good way to ensure you don’t overextend your finances and be left without something to fall back on in case of unexpected expenses.

Keep Your Collateral

Traditional banks require collateral and good credit to take out a loan, but cash advances rely on your future revenue for payments, so the lenders are not as interested in your finances as long as you can prove that your company has income coming in each month.

Get Money Faster

Trying to take out a loan from a bank is a long process. In addition to filling out many pages’ worth of information, you may have to wait weeks or even months to hear if you’ve been approved. A merchant cash advance requires much less paperwork and while it can take up to 10 days to be approved, many people receive money within 48 hours.

Pay a Percentage

Cash advances allow you to pay them back in percentages based on your revenue each month. If you make $20,000 and agreed to pay 20 percent per month, you’d pay $4,000. If you make nothing in one month, you won’t owe the lender anything for that month. This is especially beneficial for companies with income that fluctuates depending on the season. Traditional banks require a set amount each month regardless of income, which can be more difficult to pay in the off season.

Despite its many advantages, you have to be careful about finding a merchant cash advance lender just like you would any other type of lender. Research the company first to ensure they are reputable and will follow through on their end of the contract.

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