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Top Signs Your Small Business Needs a Merchant Cash Advance

Struggling with cash flow? You’re not alone. According to a survey from U.S. Bank, 82% of small businesses fail because of cash flow problems. Year after year, small business owners admit that cash flow is one of their tops – if not number one – challenges. 

Maintaining cash flow is difficult when business is good, when the unexpected happens, it can feel nearly impossible. One of the most popular solutions for cash flow issues today is a merchant cash advance. If you’re unfamiliar, the following information will give you a glimpse of how this financing tool works, as well as signs that this solution might be right for you.

What is Merchant Cash Advance?

First, what is a merchant cash advance (MCA)? A merchant cash advance is a funding option businesses turn to when suffering from cash flow issues. It allows you to receive a one-time, lump-sum payment which you then repay through a percentage of your sales over time (usually credit card transactions). These payments are typically made daily and automatically as your business generates transactions. The total amount to be repaid is calculated by a factor rate; this is generally based on your business’s financial status.

Merchant Cash Advance Providers

The key to ensuring your merchant cash advance experience is a success is to take the extra time to research and compare providers. There are countless providers on the market today, all of them promising to offer the best services and rates. But not all are created equal. You need to know that the provider specializes in working with your business type and industry, as the challenges each business owner faces are very different. They should also provide customized products that keep your unique needs in mind.

Top Signs an MCA is Right for You

Here are a few signs a merchant cash advance might be the solution you’ve been searching for:

  • You need cash fast. A merchant cash advance can provide money in as little as 24 hours, depending on the lender you choose. No more waiting weeks or months to hear back from a lender, only to find out you’ve been denied funding.
  • You don’t qualify for small business loans. Many businesses are denied traditional financing for one reason or another (limited financial history, no collateral, poor credit, etc.). MCAs are a good option for businesses that don’t qualify for small business loans.
  • You have a startup. New businesses are among the group that struggles to secure financing, due to their lack of financials and history. Many lenders deem them too risky. Merchant cash advance providers are known for being a great source of capital for startups, with a simple and hassle-free application process.
  • You run a seasonal business. Temporary cash flow issues are an all too common problem for seasonal businesses. MCAs are a perfect solution for covering short-term or one-time business expenses.

All in all, if you’re short on cash. Make sure you check out your options with a merchant cash advance provider. With their help and support, you can relieve temporary cash flow issues and fuel further growth.