merchant cash advance

When is Merchant Cash Advance a Good Idea


A Merchant Cash Advance is basically an option that gives you immediate capital in exchange for your future debit as well as credit card sales. Unlike other loans, there is no interest rate here and no fixed time period for repayment.

Most MCA providers who contact borrowers through merchant cash advance leads to accepting all documentation online. All that you need to do is log in to their website, fill up your details in the application, attach the necessary documentation, and submit your application. If the MCA provider finds everything right, you should get the amount in your bank account within a few days or hours.

Merchant Cash Advance is the fastest way to obtain the required funds you need for running your small business. The repayment here is very easy and automatic. A specified percentage of your sales gets credited to the MCA provider’s account as and when the debit and credit cards are swiped at your POS. Nevertheless, you will end up paying back a lot more than what you would pay if you take a traditional loan.

A merchant cash advance may not be suitable for every business. However, in certain circumstances, it might seem apt to apply for an MCA. Here are some such situations that make MCA worth considering:

When you are experiencing severe cash flow problems

Slow-paying invoices can create major cash flow problems for small businesses. Since most such businesses are totally dependent on such receivables, they find it absolutely difficult to cover their operating expenses. When the choice is between borrowing money and closing down the business, applying for a merchant cash advance can actually make sense. The amount can easily cover the operating costs and make it smoother to run business for long.

When you have to expand your business immediately

Growth opportunities are rare for small businesses. When you find such an opportunity you have to make the most out of it. Many times, lack of finance can make it difficult to grab such opportunities. By supplying the required cash within time, a merchant cash advance provider can help you maximize such opportunities and take your business towards growth and success.

When you don’t qualify for a traditional loan

Most banks and traditional finance institutions approve loans only of those businesses that have been in business for at least two years and enjoy a good credit standing. Unfortunately, many of the small businesses don’t fit into these criteria. Moreover, it might take anywhere between 60 to 90 days for these loans to get approved and the amounts to reach the bank accounts. Considering the kind of financial issues small businesses have, they may not have the luxury of waiting for so long.

A merchant cash advance is not the only option to fund small businesses, but it definitely is one of the fastest and easiest ways to get some immediate capital. Of course, there are the above situations when a merchant cash advance might seem like the best solution. Nevertheless, it is important to explore all your options and weigh their pros and cons before you make the final decision.

Whether you decide to go for a merchant cash advance or select any other option, don’t forget to go through the terms and conditions before signing on the dotted line.

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