Authored by Phil Cohen
Merchant cash advances are becoming more well-known to businesses looking for alternative lending methods. As traditional bank loans can be notoriously difficult to obtain, as well as take weeks or even months to secure, MCA’s offer multiple benefits to companies looking for more working capital. Check out our latest infographic for more information on how an MCA can help your business thrive!
Merchant Cash Advance Infographic
Let’s face it: money is the lifeblood of any small business, but not every business has an easy time getting additional funding to grow. If you haven’t been in business for more than 2 years, or your credit is less than perfect merchant cash advances are not a new form of financing, but are becoming more and more popular for small businesses in need of funding that don’t qualify for other funding methods, it can still be very difficult to obtain a traditional loan. Alternative lending options are available, but not always well known. Never heard of it? We’re not surprised.
What is it? Read on.
28,443,856 Small Businesses in the U.S. 630,357 establishments opened in 2013…79.5 percent survived through 2014. Just 21.6% of small business loan requests are approved by big banks. 42% of small businesses say that cash flow is one of their top 5 business challenges.
How are merchant cash advances different? MCA’s offer an advance of a fixed dollar amount in exchange for a percentage of that business’s future daily credit and/or debit card sales (plus a fee & interest). Small businesses to obtain funding through MCAs obtained relatively quickly compared to other types of funding. Repayment is flexible and can be adjusted/variable to accommodate seasonal fluctuation in sales. Doesn’t require collateral. How to Qualify. Must have been in business for at least 6 months. $5,000 in overall sales per month.
Best Ways to Use MCAs
Have a business checking account with a positive balance. A business owner must have a credit score of at least 500. Purchase new equipment: new equipment is one of the most expensive start-up costs. Cover marketing costs, hire new employees, or invest in new products or technology. Expand to a new location! Having a large lump-sum advance can help spread your brand. Pay off existing debt or pay taxes. Go online or call today for more information!
Sources:
- https://www.slideshare.net/biz2credit/biz2credit-small-business-lending-index-march-2015
- https://www.sba.gov/
- https://www.forbes.com/sites/jasonnazar/2013/09/09/16-surprising-statistics-about-small-businesses/
- https://www.businessweek.com/smallbiz/content/jan2009/sb2009018_234392.htm
- dailyfunder.com