As a small business owner, you have a variety of funding options to choose from. Your business checking account may have an overdraft facility or you may be eligible for lines of credit. However, there are some key benefits that set the merchant cash advance apart from other business finance options.
#1 – Speed
Getting a merchant cash advance can be faster than securing small business loans or other forms of lending. Because your borrowing against future sales and repayments are taken automatically, there’s less need for banks to deep-dive into your financial history. This means that you won’t have a long and complex application process to wade through. It also allows lenders to make a decision quickly and give you prompt access to the funds.
#2 – Flexibility
Your repayment amount will be based on a percentage of the sales that you generate through credit card processing. This means that when you have a good month, you’ll pay back more, but if you have a quiet month, your repayments will be less. The fact that your repayments can ebb and flow with your revenue is a big advantage over loans. With the latter, you’re tied to fixed monthly payments regardless of your cash flow situation.
#3 – Peace of Mind
A merchant cash advance won’t generally require you to put up collateral as a guarantee. Other forms of lending can ask for you to sign away your home or business property in the event of missing payments. But with a merchant cash advance, you can enjoy peace of mind knowing that your personal possessions are not at risk.