Cash has frequently been called the “lifeblood of a business.” Indeed, no company can operate and survive without adequate cash “flowing through the business.” So, where can a company get the cash that it needs to stay healthy? One of the attractive avenues is a merchant cash advance. A merchant cash advance is a means of financing for a small business that allows the business to sell some of its future sales in exchange for immediate funding. A merchant cash advance can be based on credit card sales and commercial sales.
What Are the Critical Needs for Business Cash?
The critical needs for cash include:
Paying for daily operating expenses.
Acquiring technology, equipment, or real estate.
Making a company acquisition.
Dealing with business ebbs and flows or surviving during an economic downturn.
Preparing for an emergency.
Reducing expenses by paying transaction costs.
How Does a Merchant Cash Advance Work?
A lender will review company sales that can be sold and will assess the risk for their loan. The amount that will need to be repaid is based on a “return factor” that is multiplied against the amount of the loan. The loan generally will need to be repaid in 3 to 15 months. It can be repaid either through a percentage of the company’s credit card sales or by transferring funds from the business’s bank account via a direct (ACH) withdrawal.
The Advantages of a Merchant Cash Advance
A merchant cash advance offers many funding advantages compared to securing a traditional loan. The advantages include being easy to get funds and being able to set up funding quickly. Perfect credit is not required and there is no requirement for loan collateral.
On the other hand, these loans can be expensive and should be considered only as a short-term solution. Further, financing future sales can be risky.
Seek Expert Financing Assistance
Contact Capital Finance Partners to secure the funding you need. We offer a comprehensive portfolio of loan products to operate and grow your business.