5 Good Reasons to Get a Merchant Cash Advance

Whether your business is selling products or providing services, you are likely using card payment devices. Giving your customers the option to pay by card can streamline payments, making them faster and more convenient.

Since paying by card has become the norm around the world, not providing this option could actually hurt your business. By contrast, making card payments easy could improve customer satisfaction. It can also draw more customers to your business, and in the long term, improve the value of your brand and increase your profit.

Point-of-sale card machines can also help your business in another way. You can use the cash flow from card swipes to secure a merchant cash advance capital.

What Is a Merchant Cash Advance

Working capital is important for any business, but it can be crucial for small and medium businesses. A merchant cash advance or MCA is one of the simplest ways to ensure that you have enough working capital when you need it. Whether you want to grow your business or keep it running smoothly, a good working capital can make all the difference.

Securing working capital from a bank or other business funder is not always easy and may also take time. Interest rates may also be to your disadvantage. Compared to conventional funders, merchant cash advance providers offer a quicker, more convenient solution.

Here are the key reasons why you may want to opt for a merchant cash advance.

1. Flexible Repayment Term

Another regular feature of MCAs is a flexible capital tenure. In many cases, you can choose the repayment term, which gives you more freedom to plan ahead both your repayments and your investments. Whether you opt for a 6 month or 12-month repayment term, the convenience of choice proves useful.

What’s more, some merchant cash advance companies may calculate repayments based on the volume of your sales. This allows you to avoid the difficulty of paying back a high monthly installment during a season of low sales.

In terms of fees, merchant cash advance companies may charge a processing fee, but usually not a preclosure penalty fee. It’s also possible to pay capital installments every week or every two weeks for even more flexibility.

2. Flexible Funds Range

Compared to traditional lenders, merchant cash advance companies offer a broader funding range. While maximum MCA ranges vary from company to company, you can expect broader ranges than what banks offer.

Provided that you are seeing a good card inflow, a single merchant cash advance may suffice for your short-term investments. This way, you avoid having to take multiple conventional MCAs which over time could lower your credit score and make repayment more challenging.

3. Quick Online Application

For the most part, funding applications are time-consuming and possibly stressful. They may require repeated visits to the bank. But with a merchant cash advance, you can usually apply online, through a simple form that takes only a few minutes.

In addition, many merchant cash advance companies feature a quick disbursement process that could take as little as 72 hours. So, when a major business opportunity or unplanned expense appears suddenly, you can safely turn to this type of capital.

4. Good Value

An MCA can be rewarding for businesses with high monthly sales from card swipes. Whether you’re running a small clothing store or a large restaurant, providers usually calculate the maximum amount you can borrow based on your monthly card settlement.

This way of calculating how much you can borrow enables you to take advantage of opportunities as they come. With a merchant cash advance you could get up to 200% of your monthly card settlement.

5. Simple Requirements

With most merchant cash advance providers you can expect simple requirements. The key ones include:

• a minimum turnover
• being in business for at least one year
• a minimum monthly card volume
• a card acceptance vintage of six months
• a minimum of settlements per month

One thing to note about merchant cash advance companies is that they may associate with specific POS card machine vendors. This may lead to customizable funding options and other offers. So, when looking for a merchant cash advance, take into account the POS system you use and explore all your options.

Closing Words

Businesses looking for a viable alternative to a conventional funding may turn to a merchant cash advance. This type of funding can be especially attractive if you need to maintain a healthy working capital or take advantage of unexpected opportunities.

Its convenience and repayment flexibility can help you remove financial barriers and focus on what really matters — running your business, and running it well.