Whether you’ve just started your own small business or have been running a major corporation for years, maintaining consistent working capital is key to keeping operations running efficiently and effectively. Unfortunately, keeping a steady stream of cash flow is sometimes easier said than done. If you need some extra cash to keep you going for short periods and you don’t want to go to the hassle of applying for a burdensome traditional loan, you may want to look into getting a merchant cash advance instead. To learn more about this alternative funding option, the benefits it can have and whether it could be a good option for your company, read on.
1. You Don’t Need Perfect Credit
For some conventional loans, less-than-perfect credit can be a barrier to getting good terms or even securing the amount that you need. A merchant cash advance, however, involves the discounted purchase of part of your future credit card sales. This means that you get a lump sum for a certain percentage of your credit card sales, which technically is not a loan. If you don’t have the best credit but still need cash, this can provide a great workable alternative to traditional lenders.
2. The Application Process Is Quick
Conventional loan application processes can drag out for weeks and sometimes even months, leaving you without funding while your business struggles. Cash advances, however, tend to have quick turnaround times, since they technically count as simple transactions. This means you could get the cash you need potentially within days!
3. You Don’t Need Collateral
Unlike typical business loans, you won’t need collateral for a cash advance. Since it’s not a loan, it also won’t go on your credit report.
4. Payment Is Straightforward
If you’re tired of dealing with complicated bank loan repayments, you may be pleasantly surprised by the straightforward nature of cash advance repayments. They’re usually revenue-based, so you pay based on a percentage of what you make per month.
Whether you need to repurchase inventory, pay for expansion expenses, or simply cover the basics like payroll, working capital is key to a successful business. While maintaining steady cash flow can sometimes be a challenge, getting a merchant cash advance can provide you with the money your company needs without having to go through the lengthy application process of a conventional bank loan. Keep these key facts in mind and you can confidently decide whether a cash advance is the right solution for your business.