Access to working capital is essential for a small business to find lasting success. Unfortunately, there are many problems that can arise and disrupt your company’s cash flow. Without capital, it becomes difficult to invest in growth opportunities, pay your staff, and cover the many operational expenses related to your daily processes. Thankfully, there are a number of alternative financing solutions aimed at helping you through difficult periods. A service like a merchant cash advance can deliver the funds you require. Review these points and see if an MCA is right for you.

Understanding Cash Advances

A cash advance of this nature is based on the credit sales your business conducts. A lender will review your financial records and assess how much money your company makes via credit transactions within a set period. The lender will then provide you with an advance based on how much you are likely to earn. The payments you make to the lending institution will come directly out of your future credit sales. If you’re experiencing setbacks from a lack of capital, this service can offer an ideal way to stimulate your cash flow fast.

Learning About the Benefits of MCAs

You can expect a number of advantages when using a merchant cash advance for your small business. Unlike other financing solutions, your approval is not based on your credit history. This means even applicants with bad credit ratings can still qualify for an advance. The approval rate for cash advances is also higher than the rates of other financing options like SBA loans. Since the advance is based on your projected credit earnings, the lender will not require you to put down any assets as collateral in order to secure the funds.

Reviewing the Payback Process

Though an MCA is a fast and effective way of gaining access to funds that your business needs, it is important to review how the lender will collect payments from you. Essentially, your repayment plan is based on how much you earn via credit transactions. If you see higher credit sales during one month, then your payment for that month will be higher than it would during a time when your earnings are lower. An advance of this nature is also not reported to credit bureaus, meaning your payments will not impact your rating.

When your business needs fast access to capital, it is important to look over the financing options available to you. Learn more about how to apply for a merchant cash advance and take advantage of this simple and helpful service.