When your business needs money, what’s the first thing that comes to mind? If you’re like most business owners, your first thought is likely a business loan. While loans have their place, they’re not right for every situation, nor are they necessarily right for every business.
If you don’t qualify for a traditional business loan, you still have options. One such solution is a merchant cash advance (MCA). With this solution, you receive an advance from a company in exchange for a portion of your future credit card sales. Here are four advantages to this method of financing.
It’s Not Technically a Loan
A merchant cash advance isn’t technically a loan. Instead, it’s an advance on your future sales. Securing an MCA won’t negatively impact your credit score. You also don’t necessarily need to have a great credit score to obtain approval. Using the funds from your MCA to pay off existing debts, however, can help to boost your credit.
Fast Access to Working Capital
Sometimes, you don’t have the time to wait for financing. Traditional business loans can take 30 to 60 days to fund. If you need money right away, a loan isn’t the way to go. An MCA, on the other hand, provides you with fast access to working capital. Once approved, you generally receive the money in less than a week. You can put the funds to work more quickly, allowing you to start improving your bottom line.
A Quick and Easy Application Process
Traditional business loans and SBA loans require a substantial amount of paperwork. The applications themselves are several pages long. Then you need to provide numerous types of documentation. When it comes to an MCA, the application (which you may fill out online) is generally only a page long, and you only need to submit a few pieces of additional information. You can complete the process quickly and often receive a response in as little as 48 hours.
Run Your Business with Less Stress
Let’s face it, being short on funds is stressful. You have to watch every cent to ensure you don’t go in the red. An MCA helps to boost your cash flow, which can then alleviate your stress. You’ll be able to focus on your business and enjoy it again, rather than worrying all of the time.
If you need fast cash for your business, a merchant cash advance may be the right solution for you. Make sure to read the fine print carefully so you know what you’re getting into before you sign anything.