A merchant cash advance provides short-term funding for businesses that take payment via debit and credit card. Unlike an unsecured business loan with a fixed monthly repayment, you make the loan repayments based on a percentage of your card revenue.
Is a merchant cash advance right for you? Here are some of the top reasons that businesses apply.
One of the main reasons businesses turn to merchant cash advances is the speed that they can access funds, merchant cash advances can be approved and funded within just a matter of days. This rapid access to cash can be a lifeline for businesses facing immediate financial needs, such as upcoming payroll, purchasing stock, or handling emergency repairs.
Merchant cash advances offer flexible repayment structures that are tied directly to the business’s daily credit card sales. Instead of fixed monthly payments, repayments are made as a percentage of daily sales. This means that during slower periods, the repayment amount decreases, easing the financial burden on the business. This flexibility can be particularly beneficial for businesses with seasonal fluctuations in revenue.
Unsecured business loan lenders often have strict qualification criteria, including high credit score requirements and minimum trading times. Merchant cash advances focus more on the businesses sales performance, rather than its credit history. This makes merchant cash advances more accessible to businesses that may not qualify for conventional business loans due to poor credit scores or a lack of trading history.
There are typically no restrictions on how businesses can use the funds obtained through a merchant cash advance. This means businesses can choose to allocate the funds where they are needed most, whether it’s for expansion, marketing, purchasing new equipment, or simply improving working capital.
Once you have repaid 60% of your merchant cash advance, you are eligible to apply for a top up via your online portal. The top up offer will be based on current card takings, and if approved, the funds can be with you in a matter of hours as the facility is already set up and in place.
Merchant cash advances offer a flexible, fast, and accessible solution for businesses in need of immediate cash flow. The speed, ease of access, and flexible repayment terms make it a great option for many businesses, particularly those with strong daily sales. As with any financial decision, it is important for business owners to understand the terms involved with a merchant cash advance or business loan and to ensure it aligns with their financial strategy and goals.