Solving Cash Flow Challenges Using A Merchant Cash Advance
There are a few short-term business loan type products in the market, these are designed to allow you to obtain a reasonable amount of cash for you to use as working capital quickly when you’re in need of a quick fix. How it works is you’ll receive a lump sum of cash upfront, which is then repaid to the lender over a short period of time. Even though loans like these come with higher interest rates than most loans out there, but the overall total cost for these loans may be less expensive than longer-term options with a lower interest rate.
The Merchant Cash Advances (MCA):
MCAs are the popular term of these types of loans, the MCA gives you a cash advance that you’ll have to repay in a shorter period of time with a potentially higher interest. This method is most suitable for businesses that receive a large portion of payments through credit cards (such as retail).
Is This For you?
Merchant cash advances are great for the retail and leisure niches – so businesses that make a majority of their sales through card payments are ideal.
Merchant cash advances are a really unique and innovative way for businesses to get funding fast. Whether you’re planning your next product launch, taking on new employees or looking for a solution to a cash flow gap, it could be a great way to fund it. Unlike many other types of funding, it’s relatively easy to obtain and the repayment structure is perfect for businesses that go through seasonal high and low periods.
There are many situations that can leave you with a gap in your cash flow. Let’s say you are in an industry where your customers do not pay you on delivery. If you are collecting money on a monthly basis, you will likely encounter a common problem: how do I pay my bills if my customer fails to pay on time?