CAN YOUR BUSINESS BENEFIT FROM A MERCHANT CASH ADVANCE?

Michael Foote, Managing Director, Quote Goat

 

According to statistics, a massive 82% of small businesses fail due to cash flow problems, with the majority simply unable to operate due to being unable to support the day-to-day running of the business.

When struggling with cash, many Business Owners turn to their bank with alternative funding options, primarily being arranged overdrafts and corporate credit cards. But with increasing fees and unattractive lending options, more and more are turning to alternative means of business finance, including Merchant Cash Advances.

 

Michael Foote

WHAT ARE MERCHANT CASH ADVANCES?

Originally, a Merchant Cash Advance was structured as an advance payment to a business in exchange for an agreed percentage of future sales through credit or debit cards.

Still more suited to business owners who take a reasonable proportion of their income through credit or debit cards, a Merchant or Business Cash Advance is considered a short term, unsecured business loan based on future sales.

In agreeing to a Merchant or Business Cash Advance, you effectively sell a proportion of your future sales in order to receive a large cash sum to overcome difficulties with cashflow.

 

WHY ARE THEY BECOMING MORE POPULAR?

Unlike conventional business loans with set repayment terms, many business owners prefer Merchant Cash Advances because repayments are made daily as a percentage of the company sales.

This means that if a business has achieved low income during quieter sales periods, then a lower repayment is made.

Merchant Cash Advances have become increasingly popular as more and more business owners have realised core benefits such as fast receipt of the loan payment once an initial percentage has been agreed, together with all repayments handled directly by the lender.

 

HOW CAN YOUR BUSINESS BENEFIT?

In comparison to securing a business loan via a bank, securing a Merchant or Business Cash Advance is a much more seamless process, with a quick turnaround and flexible terms to suit the business in hand.

In addition, MCA’S usually come with no interest or APR, no fixed term and no hidden charges, enabling businesses to use this type of funding alongside other loan or finance options should they need a quick influx of cash.

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