2 Simple Ways to Paying Off Merchant Cash Advances

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.