5 Advantages a Merchant Cash Advance Offers Retailers
Business is great but you need extra cash, and you need it now. How do you access the funding to need to keep your business afloat? Consider applying for a merchant cash advance to fill in the gaps. Here are five advantages this type of financing provides.
- No Collateral
Collateral is something you offer lending agency to secure financing. It can be physical property such as machinery and real estate or financial assets such as stocks and bonds. Cash advance providers do not require collateral since they automatically take a portion of your accounts receivable. This means that you do not risk losing your personal property or assets.
- Poor Credit Is Okay
You typically need excellent credit to qualify for business loans. Lenders want to know that you are responsible and have a history of making payments on time. Merchant cash advance providers, however, generally do not care about your credit. They are more concerned with your sales history than your overall debt. If you can prove that your business has reliable sales and strong revenue potential, you are likely to get approved for an advance.
- No Fixed Payments
Most financing plans require fixed monthly payments for a defined number of years. Since providers receive a percentage of your sales volume each day or month, your daily or monthly payment is proportional to your sales volume. This means you pay less when business is down and repay more as sales increase. You are not penalized for fluctuating sales and get to keep more cash in your pocket.
- Automatic Payback
Payments are usually deducted automatically by the credit card company that processes your customers’ payments. The credit card company removes a designated percentage of sales from the revenue and disperses it to your merchant cash advance provider. This means less accounting work for you and cleaner balance sheets.
- Easy Application Process
These applications are known for their speed and ease. There is less paperwork than traditional financing and less background research to perform. The application process typically consists of completing a form and submitting past bank statements and credit cards sales statements. Then, the payment system is set up and you are issued your lump sum of cash.
If your business has a reliable sales volume but you need some extra cash, a merchant cash advance might be a good option for you. Call a provider to discuss the details and determine whether it makes sense for you to apply.