Taking control of your finances is key when running a business and is essential when it comes to achieving your goals. There will come a time when you may need financial help to boost you towards success, whether that’s with a traditional bank loan, equipment loan, or the merchant’s cash advance.
Cash advances can help to free up cash flow and provide you with extra funds when you need them most. Read on to find out why your finance manager will love this option for funding as we get to grips with what a cash advance is, as well as its benefits.
Saving money when running a business is crucial so that you can build up a pot of cash to use when times get tough or in an emergency. If this is the case for you, and your looking for simple ways to save, starting with free payment processing for small business might be the best option for you to eliminate those sneaky fees.
What Is the Meaning Of Merchant Cash Advance?
A finance manager can ask for a merchant cash advance is a financial solution for businesses of all sizes. It is a way of financing your company quickly and easily. It is not technically a loan, so you won’t be repaying debt.
The merchants’ cash advance works by a lender offering you an amount of money, which your business will then repay with a percentage of your credit card sales. A cash advance allows you to obtain a lump sum of money quickly, with an easy application and fast approval process, so you can continue to work towards achieving your goals within your business.
What Type Of Businesses Can Benefit?
If you’re thinking about applying for a finance manager merchant’s cash advance, it is worth knowing if your business will benefit.
One of the first things that you should consider when applying for a cash advance from any lender, is whether you take payments through credit or debit cards and if it is a large enough percentage to contribute towards paying back your advance in full.
If you mainly take cash, this type of financial help will not be suitable. If your business is new, a merchant cash advance is a great alternative to a bank loan that you may struggle to be approved for as a young business. So, if you operate mainly with card payments, an advance is a great alternative to traditional loans.
How Can A Cash Advance Improve My Business Finances?
When running your own business, you may find that you need money quickly. If you have savings, you can use these for any emergency expense so that your business can continue to run smoothly and is not interrupted.
However, if you’re a new business, you may not have had time to build up these savings just yet, so a merchant cash advance means you can have access to funds quickly to help you with your finance manager’s cash flow when you need it most.
As mentioned previously, these cash advances are not the same as a loan, and lenders don’t consider your credit score, so you’re much more likely to be approved, even if you have bad credit. You also won’t have fixed repayments to make, so you will only repay what you can in proportion to your cash flow – no hefty repayments to make each month if you’re struggling!
What Are The Advantages?
There is a long list of benefits that come with the merchant’s cash advance, some of which we may have mentioned above, such as:
- Fast Cash: If you need to free up your cash flow quickly, using a direct lender means that all you must do is fill out an application form online that is likely to be approved in just 24 hours, so you can get the extra cash you need in no time.
- Bad Credit Option: If you have a bad credit history, you can still get the funds for the finance manager you need with this cash advance option. Your approval will be based on how your business is performing, not how it has managed to repay loans in the past.
- Early Repayments: You can settle your loan whenever is best for your business, and you won’t be penalized for it.
Are They The Best Option?
As we can see, many advantages come with the merchant’s cash advance that your business can take advantage of; but are they the best option when it comes to financing your business? In comparison to a traditional bank loan, you won’t need to complete lengthy, time-consuming forms and then continue to wait for approval that may or may not come.
You don’t have to worry about interest or making huge repayments each month, as they are all tailored to your sales. Whilst traditional bank loans are advantageous for businesses that are more established and are looking for loans that offer them a larger sum than a cash advance could, they are harder to maintain.
So, businesses that are looking for a fast injection of cash that may not be able to obtain a bank loan could almost certainly benefit from the finance manager merchant’s cash advance.
If you need finance to help you pay for equipment that your business cannot function without, a merchant cash advance may not be for you. Equipment loans are specifically tailored to businesses that need loans to help them with specific and often expensive equipment.
This is the reason the finance manager requires larger sums of money. In general, merchant cash advances are used to free up cash flow if you are struggling.