Why Merchant Cash Advance?

Are you having a tough time to step up your inventory just due to the paucity of funds? For small businesses as well as large corporate houses, merchant cash advance is a new but effective method for commercial financing. Without draining your business profits, merchant cash advance is one great financing strategy which one can adopt in case the firm needs funds for a new startup, to boost sales, for marketing, etc. Whatever be the cause, it is much better than a business loan as in that case your loan may need 2-3 months to close and you may have to pay unexpected amounts of monthly payments. Also, there is lack of flexibility, binding covenants and huge rates of interests. Thus for immediate funding, merchant cash advanced is by far the best method available nowadays.

Where can you find one and how does it work?

Merchant cash advance is given by credit card processing companies. Once you opt for a merchant account in any credit card processing company, they will scrutinize your sales for a certain period. Generally the scrutiny period is of 12 months.  You must have a proper credit report history of the past 12 months. Another clause is that you must have a premise lease which must have at least remaining 12 months. After that, you can apply for an account with merchant cash advance options in which you will be granted a loan on the basis of your credit card sales. This cash advance is given in good faith by the company to boost up your sales and provide proper funding for the normal day to day business of your company. Once you have received your cash advance, the payback does not become a headache at all. There are two options for payback; you can either opt for a fixed monthly payback scheme or a percentage setup. In a fixed monthly payback scheme, a fixed amount has to be returned every month. But most people opt for the percentage setup as it is more convenient. The payback will depend on your sales volumes, if it is high then you have to payback more, if it is low, then you have to pay less. This scheme is the best as it does not become a burden on anyone.

How it can be your savior?

Merchant cash advance is a savor not only for small firms but also for large corporate houses. Since, there have been so many bailouts by the banks in the recent past; most of them have curbed their lending options by considerable means. Merchant cash advance has opened up a new avenue for funding for your business. With the funds, you can eradicate you cash flow problems which may have been leading to layoffs and may have resulted in a possible closure of the business in the near future. You can even reduce layoffs; catch up on the pending rents, set up new inventory for your retail store, pay tax or even provide funds for the payroll of employees.

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