For businesses to grow and succeed, it requires a constant influx of capital to ensure streamlined work operations. Sadly, things do not always go as per expectations. Certain businesses are always short on working capital that is essential to finance the business.
The situation gets crucial for those businesses that do not have substantial credit or those businesses who require finances frequently.
In such a scenario, getting a loan for a business with merchant cash advance can be a blessing in disguise. So if you are a business that requires working capital, let’s learn more about MCAs, its procedures, and how it can benefit your business.
MERCHANT CASH ADVANCE – THE ULTIMATE FINANCING SOLUTION FOR SMALL BUSINESS FUNDING
Merchant Cash Advance is the best option for all small businesses who are looking to get quick working capital financing. Unlike conventional loaning options, MCA lender will provide you with upfront cash in return for your future sales. In simple words, you are ‘selling’ your future credit card receipts to the lender. To help you with financing, the Provider evaluates your business performance, sales, and annual credit card receipts before advancing a cash lump sum in exchange for these receipts.
Moreover, repayment terms are agreed after mutual discussions between both parties. MCA lender will receive a fixed percentage of your sales (daily receipts) to pay back the amount provided. You also do not have to worry about monthly fixed payments or missing a deadline date. The payments are made automatically, and they depend on the sales you have made during the day, week, or month. If your business has had a slow month, you will have to pay less – and vice versa.
There are many instances where your business is performing well, the sales are coming, and revenues are higher. But, before the revenues come in, there is a need to get fast cash to grow a business or manage other daily operations. This is exactly where Merchant Cash Advances (MCAs) come in. All you have to do is leverage your future credit sales for the working capital required today. Merchant cash advances really help you get the small business funding you need along with the boost to do business efficiently. It is a quick and reliable option that can be availed to manage business expenses.
WHEN CAN YOU LEVERAGE FROM A CASH ADVANCE?
In order to boost company profits, learning how a small business funding can help, will prevent your company from taking an unexpected hit. There are many reasons why this could happen. Your business might require an extra infusion of cash in order to purchase equipment which you previously did not have. Or you can acquire more resources that are going to help you start making profits immediately. The funding can also help you manage running overheads, i.e., employees’ salaries and day to day expenses until the company starts generating revenues.
Merchant Cash Advance providers want to help small businesses who have been performing well in the market, but they lack resources to grow and expand. When you are running a business, there comes a time when the money stops coming in for you until you expand. Thus, upfront working capital is crucial, which will help you unlock the next level. Without it, you might face obstacles and remain where you are right now. With MCAs, your business can touch new horizons quickly and efficiently.
WHY SHOULD SMALL BUSINESSES OPT FOR MERCHANT CASH ADVANCE?
Businesses that have a high volume of credit and debit card receipts are most likely to use and benefit from the offerings of merchant cash advances. Most of these businesses are small retailers and restaurants who are in need of upfront working capital at all times. However, they do not improve quality from conventional loaning options due to credit history or other issues. Getting approval from a bank lender is not easy. Thus, MCAs provide small business funding to those who are new in the industry and are unable to produce sufficient cash flow initially. The provider is more willing to fund finances to the growing business regardless of weak credit history.
Apart from this, MCA lenders do not even need personal guarantees or collateral. The best part is their fast turnaround time to obtain financing.
It is not a perfect solution to get working capital quickly and easily and has some disadvantages as well. If you are running a small business, it is important to know that you will get an MCA at a high cost. In addition, you will have to consider the payback amount and how quickly you can pay it off before signing an agreement.
Irrespective, there are many reasons why you should prefer Merchant Cash Advance for your business. Some of them are as follows:
Higher approval rate
When it comes to small business funding, MCAs have a higher approval rate as compared to conventional bank loans. It is believed that only 10% of the applications are approved by the bank when small businesses apply for a loan. In contrast, MCA providers approve 90% applicants to get a cash advance and grow their business.
Do you remember the number of weeks and months you had to wait just to get approval from the bank? Yes, we all have been there. The long and tedious process might annoy and frustrate you. For some, waiting becomes very stressful. But, this is not the case with Merchant Cash Advances. Whether the lender approves or rejects your application, you will get to know about it within a day or two. Well, you can breathe a big sigh of relief as your application is 99% likely to be approved if you opt for MCA.
No need for collateral
Despite the need, many small businesses tend to not pursue bank loans as they require collateral or personal guarantees. In case you are unable to repay your lender the full amount, they will most probably go after your personal belongings.
Whereas you do not need to offer collateral or personal guarantees in return for upfront working capital with merchant cash advance. The MCA provider will closely work with your business to regularly evaluate how your business is performing. In addition, you have to pay a fixed percentage of the future credit card receipts.
Streamlined application process
The process is simple and fast, where bank asks for years of details and document such as bank records, credit history, personal assets, earning statements, and what not – MCA is approved with less paperwork and hassle. Merchant Cash Advance provides small business funding even if you are working for six to 12 months.
In most scenarios, it takes a few hours or a couple of days for the MCA lender to approve your application to get small business funding. It all depends on the paperwork and other information you provide regarding you and your business. Once the application is approved, fast cash will be transferred by MCA provider to your business account within two days.
The procedure is simple – here, we have briefly explained the steps you should take:
ACQUIRING A FUNDING
Typically, the application form is of one or two pages only. You will have to provide your personal and business details such as social security number, business tax ID, and other information.
When you opt for conventional loaning options, they require months and years of credit process and other financial documents. MCA only asks for a proof of citizenship and few personal and business details to process your application.
Usually, the lenders take a few hours or a couple of days to approve your application for an upfront working capital.
QUICK ACCESS TO CASH
Do you feel overwhelmed by the time a bank takes to finance loans? Many people in need of money are often in a fix for several weeks to a few months jeopardizing the stability of businesses. Merchant Cash Advance will help you get fast cash within a week of your application. The process is faster and efficient as compared to traditional loan options.
IS MCA THE RIGHT CHOICE FOR YOUR BUSINESS?
One of the best financing options for a business is merchant cash advance. Whenever a company needs fast cash to take full benefit of an open opportunity, MCA is the right choice. There is less waiting time so that you can start making profits at the earliest. Whether you want to purchase inventory, hire resources, or upgrade your office space – you will have the cash on hand to get it done immediately.
If your business has experienced a financial turmoil, you can quickly resolve it when you obtain financing from the MCA provider. The requirements to get approval are less strict than bank loans, thus more and more business are seeing merchant cash advance as the best solution currently in the market.