A merchant cash advance (MCA) can be a timesaver while looking for
proper financing for your small business. It is a convenient option to grow
your business and sustain cash flows temporarily. In spite of acting as a conventional type of loan, which requires a long and hectic method of
application submission and credit score checks, besides usually complicated and
perplexing reparation terms, Merchant Cash Advances or MCAs tend to be
short-termed and keep businesses sailing in the case of any original damage
they may have to face.
Merchant cash advances are especially beneficial funding the alternative for small and medium businesses that manage a considerable
percentage of their sales through credit and debit cards. For example, if
you’re looking for a funding opportunity for a restaurant business, merchant
advance funding (MCA) would be worth recognizing as a possible funding method when
going through a bumpy fiscal point.
Value
of Merchant Cash advance in Business startup
If your small
business has only been around for a short period, has a weak credit score, or
if you do not have any marketable assets to be used as collateral to the loan -
MCA can still work for you. The Merchant Cash Advance method is rather
straightforward; the financier or the funding firm will provide a small
business with a substantial amount as a whole, which can then be repaid through
the lender receiving a cut of the debit or credit card transactions in the
future.
The sum lent
and reimbursed fluctuates significantly depending on the scope, capacity,
incomes, and revenue generated of your small business. Still, MCAs are commonly
seen as an efficient and accessible means to spout short-term cash flow
concerns. The industry is considerably large and ever-growing. Therefore, it is
essential to approach an MCA funding party equipped with the appropriate
information and awareness.
Working of MCA
Merchant cash advance providers will evaluate your bank statements
over the preceding three (3) to six (6) months to determine how much advance is
fitting to be provided to you. Usually, an advance can reach from 50% up to
250% of your business’s credit or debit card activities. But the advance
is never enough to support your true need, so business owners find themselves
taking out multiple advances to hit their goal. This method of stacking MCA’s
is dangerous to your cash flow and profitability. If you are stuck in the
hamster wheel of MCA advances her are two ways to pay them off before your
financials collapse and you are stuck.
Ways to pay Off
Merchant advance
There are many ways to pay off merchant advance but here are two most simple and effective ways.
1. Personal
Loans for Business:
Many
new small-business owners access financing through personal loans, often via a growing number of online lenders. But like credit cards, personal loans can
have high APRs, especially for bad credit borrowers.
Personal
business loans can be a good option for borrowers with excellent personal
credit and strong income.
Nilssen
says small-business owners should consider personal loans “an option of last
resort.”
“Where
they can work,” he says, “is when a business just needs a small amount of money
for things like … paying off a merchant cash advance.”
BitX
Funding
is a great resource for Personal Loans for Business check out their website for
more information.
2. 0%
Business Credit Cards
Many
small-business owners use credit cards for funding. If your credit isn’t damaged
by the merchant cash advance, you might be limited to secured credit cards,
which typically have higher fees than regular credit cards.
It’s
important to remember, however, that credit cards are a great way of refinancing
a merchant cash advance, particularly if your cash flow and profits have been
hurt by the advance. That’s because card issuers determine your approval based
largely on your personal credit scores, not the business financial health. And
research has shown that small businesses that rely heavily on merchant cash
advances tend to fail.
BitX
Funding
offers 0% business credit cards for 12 to 18 months plenty of time for the
business to reorganize its financial situation and shift the debt from a daily
payback to a revolving debt that only requires a minimum monthly payment at no
interest.
BitX
Funding
is the online marketplace for small business owners looking to fund a project.
We specialize in connecting small business owners with lenders who will compete
for your business. We believe small business owners drive the economy and we
are passionate about helping your company reach its full potential.
You
can reach loans specialist by toll-free at 1-800-824-2407, or email
at info@bitxfunding.com or applying
online here
and we can guide you on which loans are the best fit for your business.
