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4 Benefits of Getting a Merchant Cash Advance for Your Business

4 Benefits of Getting a Merchant Cash Advance for Your Business

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It's not unusual to see periodic ups and downs in your business revenue. If you have a liquidity shortage during an inopportune time, you may be able to get fast relief through this alternative means.

Fast Cash Means Greater Flexibility

Supposing you are a business owner who needs an immediate cash infusion, you should consider applying for merchant cash advance. When you apply for this type of advance, you can often receive your cash advance within as little as a week. Whatever industry you are in, timing is likely of the essence. For example, you may need additional liquid funds to take advantage of Black Friday or another seasonal business opportunity.

Alternately, you might need to purchase a company vehicle during a temporary sale at a trusted dealership. Whatever is driving your need for cash, the merchant cash advance could be the most practical way for you to receive a fast lump sum. If you've despaired of receiving fast assistance from traditional funding sources, you ought to give merchant cash advance a second look.

You Won't Be on the Hook for a Set Monthly Payment

Despite what some people believe, the merchant advance is not a type of loan. Instead, you pay back the advance by agreeing to pay a percentage of your future credit card sales revenue. This means that you won't have to agree to a rigid payment plan that could prove disastrous.

Essentially, this amounts to selling a portion of your future profits. This means that if you have a slow month, you'll remit a smaller sum than you will during busier times. According to Lantern Credit, “Merchant cash advance is the most common term used for such financing, but you may also see them referred to as credit card processing loans, business cash advance loans, merchant loans, or merchant advance loans.”

Even Without Perfect Credit, You Can Still Qualify

Since the merchant cash advance isn't technically a loan, your chances of approval may be higher than you realize. In fact, it's likely that it is easier to qualify for an MCA than for a loan or a new, high-limit credit card. MCA providers recognize that outstanding business owners don't always have the best possible credit. The main qualification for an MCA is showing that you make a decent amount of credit card sales each month. Supposing your company regularly makes plenty of credit card sales, you may be eligible for a substantial MCA.

You Can Use Your Money However You Want

The MCA is only available for eligible businesses. However, there is no restriction on how you can use your cash advance. This matters because public small business loans can have a lot of strings attached. Some of these loans can't be spent on debt, inventory or real estate transactions. This type of limitation can make it difficult to meet your immediate needs. When you receive an MCA, you'll be able to spend your cash in any way you deem fit. This provides you with the flexibility you'll require to meet the demands of the moment.

Ultimately, MCA is one of the most underused tools in the small business world. Hopefully, more people will avail themselves of this excellent tool for financial assistance.

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