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When Is A Business Cash Advance The Right Choice?

You’ve heard a lot about what a merchant cash advance is, but do you know when the right time is to use one for you small business? Or when not to use it? The following information will help you know when a cash advance is the right choice, and when it is the wrong choice for your business’ growth.

“I don’t have enough cash to cover payroll.”

This is one of the most common reasons small business owners seek funding. As your business grows and you take on bigger projects, it can be hard to come up with the cash to cover payroll. If your business experiences seasonal slumps, it will be an even greater challenge. A merchant cash advance can provide the quick injection of capital you need pay your team or cover unexpected payroll numbers.

“I need cash for an unexpected business opportunity.”

Every small business owner dreams of having opportunities. After all, that’s why they’re in business: to achieve their goals and provide a product or service that is highly sought-after. However, the problem with opportunities is that they’re always unexpected. It isn’t always easy to find the cash to leap after an opportunity before it passes by. A cash advance allows you to obtain the cash you need fast, so you never have to miss out on an opportunity to expand, increase inventory or fuel growth.

“My business is trying to purchase a new location.”

For established small businesses, land and building space are one of the most expensive costs. Even a business startup needs cash on hand to pay for office space and secure a location. Depending on your business type, traditional lenders might shy away from working with you. They might find your business “too risky”, for one reason or another (e.g. high chargeback rates). A merchant cash advance provides the flexibility you need to expand and purchase a new location when you really need to.

“I need to replace some of my business equipment.”

Unfortunately, equipment can break down when you least expect it to – and when you’re not prepared for it to. Trying to come up with the cash to purchase new equipment can also be difficult when you still have your daily expenses to worry about. With the quick cash a merchant cash advance provides, you can quickly make equipment repairs to keep your operation running smoothly. You can also shop for and purchase new equipment to replace outdated items or expand your operation.

 “I need cash for a personal expense.”

There are situations in which a merchant cash advance is not the right choice. This is one of them. You should never use a cash advance for a personal expense. It could get you into a lot of trouble down the road and hurt your business growth prospects. Any working capital you receive needs to be reinvested into something that will show profitable returns for your business.

If you need a merchant cash advance, you’ll be glad to hear that you can secure capital in as little as 24 hours with First American Merchant. The online application takes just minutes to complete, and our team of experts can help with any question you might have about the process.