So you are a small business owner in need of capital now. Well, we all understand that beyond making marketing researching and a strong business plan, one of the most intimidating parts of businesses is its financial aspect. While most of the small businesses fail because of making a wrong financial decision, others take a step back due to lack of their funding system. In order to pursue your dream and let it take the right track, opting for the right financial system or including the merchant cash advances can simplify it.
What Exactly Is Merchant Cash Advance?
Let’s first make it very clear that even when merchant cash advance can fulfill your funding needs, it is not actually a loan. Here small business owners receive capital or upfront cash where the repayment will be made from their future sales. Unlike the bank loan system where there is interest added to the payment, this is different. Here the merchant who lends you will make back from the sales percentage that your business makes.
Since the advances are agreed upon a fixed percentage, these are automatically taken out when your business is making sales. It keeps repayment on schedule, along with the merchant is aware of your business sales. In case your business cannot make money, they too will not be able to make money. This is the reason why it is said as a wise decision for small business owners.
Advantages of Merchant Cash Advance:
There are myriad of reasons that make this funding process an appealing choice.
The Speed of Obtaining Cash: Starting a business means the need for money from the very first day and when it is about obtaining cash in the least time, merchant cash advance stands out. If you have decided to opt for it, you can acquire capital within hours. When compared to traditional banks, getting funds can take weeks. Moreover, merchant lending does not always need huge lending companies.
Less Paperwork: Unlike any other funding procedure that requires tons of paperwork to deal with, merchant cash advance is completely different. During the initial days, all you need is to concentrate on your business, rather than running to banks for completing the paperwork. Undoubtedly paperwork is a must when it is about huge funding system, but here the paperwork is lesser in compared to other loan systems.
It Is A Flexible Choice: This is one of the most flexible choices made by business owners. There is no monthly payment along with more time to pay the capital as it is taken from the percentage they signed for. MCA is very effective for the businesses that have a slower pace or that have completely new service or products to offer. Since it takes time for people to comprehend the business, this funding system can be very advantageous. All you need just to sign up for small percentages of the company’s profit and you can receive funds you need for business growth.
So, it is now clear why MCA has been in demand as a great small business funding system. Not only it is a great way to secure capital, but also it gives less headache that increases in interest rates and monthly payments do. Even if you are struggling in the initial days, you do not have to think how to pay the interest as you are paying directly from the company’s profit percentage.