Are you anxious about where to get funding for your newly-established enterprise? A merchant cash advance, or MCA, could be the best option at your disposal.
A MCA is a form of credit arrangement, where a provider gives a merchant working capital in exchange for a corresponding amount of future credit card sales. This financial solution helps the borrower to fund expenses without monthly loan commitments.
Features of a cash advance
Merchant cash advances are similar to loans in that they’re funds given to a borrower for repayment with interest at a future date. However, both methods work in very different ways. The key features of a MCA include.
Easy to get
Unlike a bank, which has to extensively evaluate a borrower to decide if they’re worthy of a loan, an advance provider only needs proof of steady sales. Whether a business gets funded or not won’t depend on factors like bad credit, the level of risk or lack of collateral. In most cases, a merchant with pleasant sale records will easily get a cash advance.
Simple application process
Because a provider demands much less information from a borrower, application forms are simple to fill, and requests are approved much faster than loans. Well-established financiers, such as First American Merchant, are known to process and deposit advances in less than 48 hours.
Businesses have the freedom to pay a cash advance according to their sales. Because a MCA is serviced by small portions of individual sales rather than a fixed lump sum amount at the end of the month, an increase of decrease of sales affects how much the borrower will pay. This makes it more forgiving to businesses that are susceptible to slow months.
Using a MCA for your new enterprise
vA cash advance is a quick, short-term funding solution that is ideal for short-term needs that demand immediate financing, such as paying monthly bills, financing an earlier debt, hiring and paying employees, buying new equipment, or making necessary renovations.
You could also use a MCA to improve your customer reach and maximize revenue, by purchasing more inventory to cater for an expected rise in demand or expand your store to make your product accessible to more people.
When used wisely, a cash advance can help to fix financial problems and accelerate growth.
To most merchants, MCAs are only small readily available economic boosts that can be quickly cleared off when sales are good. For a young business, however, a merchant cash advance can be the much-needed stepping stone to achieving success.