Can You Benefit From a Merchant Cash Advance?

Growing a business means finding a source of working capital. If your company’s success depends on the waxing and waning of the economy, it can be challenging to find loans.

Fortunately, lump-sum loans aren’t the only financing options. If most of your profit comes from credit card sales, you can benefit from a merchant cash advance.

This advance is taken against your merchant account rather than being provided as a straightforward loan. It offers a long list of advantages that other financing can’t compete with.

Collateral Isn’t Required

While many loans require collateral, a merchant cash advance doesn’t. That means you don’t have to risk assets if you default. While some business loans, such as unsecured business lines of credit, don’t require collateral, they also have high-interest rates to balance the risk. In contrast, when lenders offer a cash advance, they usually charge a fee rather than interest.

Funds Are Incredibly Flexible

Once the cash is in your account, you can use it however you see fit. That may include purchasing more inventory to ramp up sales, expanding your workforce to take on more projects or purchasing real estate to set up a new location. Only you know what your business needs, which is why flexibility is so valuable.

Payback Is Easy

Traditional loans require you to make monthly payments until the principal is completely paid off. That can be years, and if you miss a payment, you’ll incur late fees and even get a mark on your credit.

By contrast, paying back a cash advance is much easier. As you make credit card sales, a portion of the profits goes to pay back the advance, plus the lending fee. Since the process occurs automatically, you don’t have to worry about missing payments.

Funding Is Incredibly Quick

When you apply for a traditional loan, it can take weeks for the bank to give you an answer. If you need the funds for a business opportunity, that timeframe just doesn’t cut it. On the other hand, a cash advance can be processed quickly. In some cases, you can even get the funds within 24 hours.

Getting locked into a loan can be as much of a setback as it is a boon; if you need to apply for financing in the future, that loan will show up in a credit check. As a result, banks may not lend to you. A cash advance, however, won’t show up unless it’s gone into default. No matter how you look at it, a merchant cash advance is an ideal option for companies in need of financing.


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