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Reasons Business Owners Get a Merchant Cash Advance

If you’re a small business owner, you know what it’s like to be short on cash. Seasonal slumps, plans for expansion, and hiring new staff all require money. Covering day-to-day costs like payroll also require positive cash flow. If your business is a startup, you will really need a steady flow of capital to keep your new venture running smoothly and to seize new opportunities when they come your way.

It can be really frustrating to find cash as a small business. Traditional lenders typically shy away from small businesses, preferring to work with bigger businesses. If you are a startup, this task will be even more challenging. Luckily, you have more options at your disposal than just the traditional bank loan.

More and more small business owners are turning to the merchant cash advance. In fact, for some, it has become their go-to solution. What is a cash advance, and where can you get a cash advance?

What is a Cash Advance, and How Does it Work?

Essentially, a merchant cash advance is a sale – not a loan. Your business sells its future sales at a discount in exchange for a lump sum payment. The easy collections process allows the provider to automatically withhold the monthly payment, so you can focus all of your attention on growing your business.

You can get a merchant cash advance from an alternative provider like First American Merchant. The key is to work with a provider that specializes in working with your business type and industry. As a high-risk specialist, the team at FAM have years of experience in working with many different business types.

The following list includes the top ways small businesses use a merchant cash advance:

Boost Cash Flow

The biggest reason business owners apply for a cash advance is to boost working capital. The flexibility a cash advance provides allows companies to have better working capital flexibility, so unexpected expenses are no longer an issue. Seasonal changes or slumps can also be better managed with this increase in cash (e.g. extra holiday inventory).

Fund a New Location

Another common reason to take out a merchant cash advance is to expand to a new location or office. Business can expand so rapidly that it’s actually a big problem to keep up with sales and growth. A cash advance helps to cover the costs of expansion, so you don’t have to wait or (worst case) a lack of cash slows down growth opportunities.

Purchase New or Repair Equipment

Purchasing new equipment or having to repair equipment is a huge cost. Many businesses simply do not have the cash on hand to handle these costs and seek additional funds. A cash advance offers a quick solution, so you can upgrade your equipment and minimize liability.

Cover Payroll

In some situations, it can be hard to find the cash necessary to cover payroll. For example, if your business has huge costs for a large project, you might need extra money to pay your staff. A cash advance can help cover a cash flow gap, so you can pay your workers on time.

Our team of experts specialize in providing cash so small businesses can focus on growth. Would you like to learn more about a cash advance? Contact our team to hear more about this option or start the process to get a merchant cash advance.