subject: Merchant Cash Advance - Does It Still Make Sense? [print this page] Merchant Cash Advance - Does It Still Make Sense?
In recent years, there has been an increasing industry trend where an influx of merchant cash advance providers have been able to provide more and more small to mid-sized businesses across the nation with capital to boost sales or step up inventory. This new type of loan is often referred to as a merchant cash advance.
During the credit-crunch times the merchant cash advance industry provided an alternative source of operating capital needed to keep many small businesses afloat. Now, as the economy is finally showing signs of recovery, does it still make sense to look to MCA industry rather than the traditional bank loans for business funding?
Absolutely!
Unsecured merchant cash advance financing provides us with a number of benefits over of a traditional business loan; two of the most important that have the greatest impact to you and your business are:
* Payments Based on Revenues. Unlike a traditional small business loan, a cash advance is based on the volume of your business. The percentage set-up means that when sales are down, the monthly payment will be reduced accordingly. If you have a slow month, you won't be stuck paying a high loan payment. It's a win-win situation.
* Performance Optimized Funding. It is customary for the banks to look at your past business activities and current personal financial situation in determining your eligibility for a loan. The merchant loan provider focuses on your future and on-going transactions and optimizes the funding amount accordingly. This way you never borrow more than you can repay.
The functions, features and benefits of merchant cash advance funding are not limited to slow or poor financial conditions. Variable payments based on actual credit card sales, and funding amounts based on value you've created through hard work are good things to have in any economy.
