For small and online business owners in need of fast access to capital to grow their business, business cash advance – also known as “merchant cash advance” – is a solid option. So, what is a merchant cash advance? In a merchant cash advance, a merchant gives businesses upfront cash or capital in exchange for a percentage or a portion of future credit card sales.
Many small or online businesses are in need of merchant cash advances for things such as making payroll, growing inventory, purchasing new equipment/packaging/supplies, marketing or advertising dollars, expansion/renovation of business, rent payments, and more.
If you have had strong sales, but struggle with little or bad credit, a merchant cash advance may be a particularly good option for your small or online business. Getting the capital you need when you need it can mean the difference between the success or failure of your business.
Merchant Cash Advance Benefits:
GET CASH FAST
One of the biggest positive factors for small or online businesses when considering these kinds of business advances is getting the cash quickly. Business cash advances do not take as long to process as traditional bank loans. In fact, First American Merchant can provide capitol or funding in as little as two business days. This is good news for business owners who simply don’t have the time to wait for long processing that is typical of many banks and larger lenders.
LITTLE TO NO PAPERWORK
Everything is done online. So there’s no lengthy paperwork to fill out, fax, scan or mail. This decreases your wait time and increases your turnaround time.
REPAYMENT IS NOT A FIXED MONTHLY AMOUNT
Another benefit when considering these types of advances is that repayment may be easier over time. This may work in the business’ favor, particularly if sales are slow at first, because payments are based on a percentage of sales, rather than a fixed monthly amount. So for example, let’s say a merchant cash advance company offers XYZ Business a merchant service cash advance in the amount of $10,000, with repayment terms of 10% of monthly credit card sales. The first month’s repayment amount is automatically sent back to the company and is a percentage of XYZ’s monthly sales. If the first month’s sales following the advance were $1,500, then XYZ Business would have $150 deducted automatically (via PayPal or other transaction service) to be paid to the company that issued the merchant cash advance. If the second month’s sales were only $900, then XYZ Business would have $90 deducted.