Cash flow impediment is one of the biggest problems businesses, especially young ones, face every day. A merchant can have slow cash flow because of several factors, some of which are outlined below.
- Weak sales
Traders who are not selling enough to satisfy their target and meet expenses are already experiencing cash flow issues. Reasons for a reduction in the number of daily transactions can range from poor business management to an unexpected change in the market, such as the entry of a dominant competitor. It is also common for new businesses to suffer low sales in the first few months of operation.
- Unexpected expenses
If an office equipment malfunctions or an essential employee fails to report to work in the morning, you’ll have to bear the immediate burden of making repairs and hiring contractual staff. If the situation demands a lot from your business account, a cash flow impediment will likely ensue.
- Account receivables
Enterprises can have cash flow issues when their clients don’t clear the books in time. If there’s a lot of money owed to you, but your customers have the freedom to take even a month to pay in full, you may have a hard time paying your bills and meeting normal operating expenses.
Whatever the cause, cash flow problems can be frustrating. Additional funding is often required to streamline the situation. Although you could opt for banks and other traditional lenders, cash advances are the best option.
Fast access to funds
Unlike loans, which require lengthy applications and long-term commitments, merchant advances will give you quick access to the resources you need. A financial solutions firm like First American Merchant can buy some of your account receivables and immediately give you money based on their value. This way, you can pay your bills and meet the demands of your suppliers in time.
Even without account receivables, you can still qualify for an advance, which you will be servicing with your daily credit card sales.
Loans will always be breathing down your neck at the end of every month, but because payments for cash advances are broken down into small percentages, they’re ultimately a lot easier to clear. When your sales recover, you can repay the advance and be debt free in just a few weeks or months.