Government loan programs are fizzling out, yet the holiday season is a stone-throw away.
How do you plan to meet the financial needs of your business at a time when nothing matters more than preparing adequately for the oncoming shopping spree?
For many businesses, traditional loans are a no-go-zone because of failure to meet specific criteria. Plus, banks aren’t as willing to supply loans as before, given the pandemic’s uncertain nature and current economic status.
And when your business is short of finances, you cannot achieve essential holiday season duties like;
- Refill or diversify your stock of goods for festive shopping: As the holiday approaches, businesses will need extra funding to replenish their supplies.
- Hiring more staff to serve the looming influx of customers: Due to long holiday queues in online and offline stores, your current employee base may need assistance.
- Purchase more inventory: Is your store and warehouse ready to meet the holiday season demand?
- And this year, you must prepare a COVID-resilient holiday strategy that will protect both staff and customers.
With so much to do and too little finances at hand, where do you begin searching for extra money?
Many other alternative lending options may suffice, but if you accept card payments, then your best bet lies with a merchant cash advance or MCA.
What’s an MCA?
A merchant cash advance is when a lending firm gives an advance amount to a borrowing company in swap for its per-day business sales.
In a nutshell, a business receives an upfront lump sum from a lender, which the latter later deducts automatically from its daily revenue.
The parties agree on a deduction rate, but this amount isn’t always fixed; a business pays per its daily revenue, meaning you pay back less when sales dip and more during peak moments.
Plus, instead of interest rates, MCAs charge APRs or annual percentage rates. These loans are unsecured and need no backing, making it just the right medicine if you lack the collateral to back a collateralized bank loan.
But MCAs are not without downsides. Perhaps the primary problem is the invasion of phony lenders who rip off customers with exorbitant three-digit APRs and unfair terms, including hidden fees.
Why an MCA is the Right Choice
Feel free to explore other options but be sure to ponder over the MCA decision. While a poorly-built product can threaten to shake your bottom line, the right MCA can see a business through a financial crisis and help keep it afloat.
The secret is in the lender you work with, and the type of product you choose, so in-depth knowledge of the MCA process increases the likelihood of landing a fairly-tailored merchant cash advance deal.
And when you do; you enjoy all the following;
- Stress-free online application and quick acceptance, which matters especially when you need speedy funding.
- You don’t undergo strict underwriting procedures as with traditional bank loans.
- There are no collateral requirements for MCAs, as the lender counts on a business’s daily sales.
- Hassle-free repayment. Pay more during peak sales and less when sales dip.
MCAs are lifesavers when business finances are tight. Do thorough research before taking out a Merchant Cash Advance to get the best offer.