Is a merchant cash advance good for my business? Leave a comment

Is a merchant cash advance good for my business?

Easy repayments

Repayments for merchant cash advances are relatively painless as the lender works directly with the card terminal provider. The percentage they take for repayments is never in your business’s bank account, but instead is ‘taken at source’ — in much the same way that most people pay income tax.

Unlike other types of finance, the money is taken automatically until the debt is paid, so it’s a ‘hands-off’ setup from the point of view of the business owner. That means you can spend less time worrying about finances, and more time running your business.

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Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

Frees up other forms of finance

Another benefit of a merchant cash advance is that it effectively opens a new line of credit. Your business can use other types of finance at the same time as a merchant cash advance, which can be useful for lots of businesses. For example, if you have an equipment lease already, it’s possible to get a merchant cash advance for more general cash flow at the same time.

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Let us help you find the best financial product in the market. We will guide you through the payday loans in Maryland whole process and make sure you get the best deal.

Merchant cash advances have lots of benefits, but there are some drawbacks to consider too such as higher fees and the amount your business can borrow as it depends on turnover.

It’s limited by cash flow

If you want to borrow £5,000 but your business makes £1,000 per month, your business is unlikely to secure that level of lending as it’s not in line with your cash flow position. You’re generally able to get finance equivalent to what your business receives in an average month — so for the example above, £1,000 is a much more realistic figure.

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

If your business receives payment in a variety of different ways, merchant cash may not be a perfect solution. It’s best-suited to businesses that do the majority of their business via a card terminal.

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

Lenders are specific with terminals

Another point to consider is that many lenders only work with specific terminal providers, which means your choice might be limited depending on the provider you currently use. There are some lenders who do work with a wide range of terminal providers and our team can talk you through your options to find the one that suits you best.

Looking for finance?

Let us help you find the best financial product in the market. We will guide you through the whole process and make sure you get the best deal.

Merchant cash advances can help your business access funding very quickly; in some cases, a decision is made within just 24 hours. This makes it potentially suitable for business owners who need quick access to cash and can’t afford to wait weeks for a lender to come to a decision.В

The application process can be relatively pain-free too, with minimal paperwork required.В You’ll usually not have to offer collateral, meaning your assets – such as a car, property and equipment – won’t be at risk like they would be when it comes to other forms of business finance.В


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