What is a Merchant Cash Advance and Will it Help My Business?

While trying to deal with the ups and downs of today’s economy, you’ll hear all sorts of business solutions that are supposed to be the proverbial “magic bullet” to create jobs, to create profits and to take your business to the next level. Even though these solutions sound great, surviving the day to day is actually more pertinent and if your small business is having a cash flow issue or needs funds for seasonal stock or to expand then a merchant cash advance may be a solution that is actually useful.

There are lots of reasons why a short term merchant loan can make a huge difference in how well your business does in the future. Sometimes stock is sent to a customer who as a net 30 account (30 days to pay the tab) but that puts a dent in your on hand cash flow. Another reason is when it comes time to build up stock for seasonal needs such as Christmas that depletes overhead cash and makes it difficult to meet immediate financial responsibilities. A short term loan can give you the leverage you need to take care of business without running short of cash.

Traditional bank loans can take months to process before you actually have the cash in hand to take care of your needs. Also, bank loans aren’t usually made for smaller amounts since the bank wants to lend businesses substantial amounts that will require a long payoff period. Merchant cash advances, on the other hand, are loans that are expected to be paid back in a very short time-span and are designed to be small loans, usually under $10,000 although more can be had. The main point of a merchant loan is it’s easy to get, quick to receive funds and quick to pay off.

That’s because there are multiple ways to pay off a merchant loan, some ways that are actually automatic and almost invisible to daily operations. Arrangements can be made so the loan is actually paid off as a percentage of daily credit card processes so the process takes place behind the scenes and as a part of daily profits so the impact on overhead cash on hand is minimal. This enables small businesses to pay back the loan off of seasonal stock without having to worry about monthly payments and lump sums.

Short term solutions don’t require long term commitments. Merchant loans can be the key that actually is a solution to create jobs, to create profits and to take your business to that proverbial next level. If your small business needs a lever to create immediate cash flow, a merchant loan may be the perfect solution for you.