Choosing the Right Small Business Cash Advance for Financing Your Business Needs

small business cash advance

When you want assistance with your inventory purchases or equipment requirements and other small-scale funding needs that have to be met immediately, a merchant cash advance is ideal. Merchant cash advance is a type of small business cash advance that is financed on the future receivables via credit card.

Unlike the monthly payments on other loans, the merchant cash advance amount is repaid daily by taking a percentage of the daily credit card sales you receive. If you have good sales, the payments are completed faster. On the other hand, if sales are sluggish you may have to pay for a longer term.

Read More: Understanding the Different Types of Alternative Business Funding

When does merchant cash advance help?

If you require debt financing for buying new equipment, purchasing inventory and to meet short-term cash crunch in your business, a merchant cash advance is very useful. It is a small business cash advance loan that can fit your financial needs perfectly provided you avail the services of the right lender. The benefits of choosing an appropriate MCA lender include:

Easy Repayments

Since the repayments are calculated daily and depend on the credit card sales you record daily, you need to pay only when you earn.

Quick approval

Merchant cash advance is a type of small business cash advance that eliminates all the hassles you associate with conventional loans like long waiting time and elaborate application process. Merchant Cash advance can be applied online easily in one or two minutes and approved within 24 hours. You can access the funds you need in one or two days maximum.

Ideal solution

If you own a seasonal business or one that sees fluctuating sales, merchant cash advance is an ideal solution. This is also great for businesses that are testing new market opportunities or new products. You can get a loan amount that is 250% of the sales you do via credit card every month. The large fund amount you are eligible for via this type of small business cash advance helps you take care of the immediate funding needs of your business fully.

Factors to consider

Before you consider using merchant cash advance loan you need to consider factors such as how seasonality impacts the volume of sales and your credit card sales percentage. You can approach merchant cash advance lenders to know about these criteria so you can meet your finding needs appropriately.

Read More: Merchant Cash Advance: Small Business Funding Made Easy

In general, lenders will require your business to have been operating for a minimum of one year. You should also have revenue of a minimum of $5,000 per month.

Some small business cash advance lenders allow even newbie businesses with just three months of sales volume via credit card to apply for the advance. Such businesses will be provided a funding equal to about 50% of their monthly average credit card sales.  Once the business has paid off the advance, it can apply for a similar loan on better rates. Many lenders dealing in Merchant cash advance also offer other alternative loan options and even debt consolidation services that you can make use of to meet your financing needs.

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