The Basics of Merchant Cash Advance
Are you ready to boost your working capital and take advantage of a competitive financial tool? Discover how a merchant cash advance can power your business through any slow season or cover a sudden expense until you can get back on your feet. Use this dynamic funding option for flexible working capital.
One of the biggest advantages of a cash advance is that it isn’t a loan. While it works with some of the same principles of borrowing from a bank, it simply gives you your cash earlier than expected. If you accept credit cards, you probably have a good idea of your routine payment processing. A cash advance gives you a set amount of money based on your future sales.
After you receive the set amount from your merchant cash advance you simply pay a percentage of your daily or weekly sales as payment until you pay back a predetermined amount. You’ll pay slightly more than you borrowed, but you can use your cash immediately instead of waiting for sales to come in.
Because the payment plan is based on a set percentage of your sales, you won’t have to worry about making payments on time or affording payments in addition to your other expenses. A slow day or week doesn’t cause you to fall behind on payments, but you’ll make it up with future payments when sales are high. This greatly reduces the risk of taking on a short-term financial arrangement. Don’t let the risk of a quick turnaround prevent you from taking the flexible, competitive boost in working capital.
You typically don’t have to worry about offering collateral or a down payment for your advance. Compared to loan options you don’t have to have a high credit score or a long-standing business. This short-term financing solution is typically repaid in just a few months or just over a year. It can be much more affordable than using a credit card or a short-term loan, but it won’t give you a long-term working capital boost if you need to grow your business for years before increasing your profits.
A cash advance can be set up through your card processing company, so you typically don’t have to worry about scheduling a payment or determining the percentage. Use this convenient financing option to make payroll, invest in new inventory or take on another project. Grow your business without going into debt with a merchant cash advance.