The Merchant Cash Advance: A Business Funding Opportunity for SMBs

More and more small and medium-sized businesses (SMBs) are realizing the benefits offered by the merchant cash advance. A business can obtain the working capital they need more easily with this method than with a conventional bank loan. If there is one main concern startup businesses share, it's the matter of finances. While a larger…

More and more small and medium-sized businesses (SMBs) are realizing the benefits offered by the merchant cash advance. A business can obtain the working capital they need more easily with this method than with a conventional bank loan.

If there is one main concern startup businesses share, it's the matter of finances. While a larger company can usually afford the occasional loan for their needs and pass the loan's requisites, an SMB may not fare as well. Aside from the mountains of paperwork and red tape, there are also the bank's stringent background checks that make it very difficult to get an approval for a loan.

Conventional bank loans also take time to process, which may not be ideal for the SMB that needs the cash as soon as possible. Using a merchant cash advance, business owners and up-and-coming entrepreneurs can be provided with money on demand. A good cash advance service provider can get an applicable their money – up to $ 20,000 – in as soon as three days.

This provides SMB owners with more time to use the cash according to their businesses needs, despite to restock the inventory, to pay employees on time, or to make necessary repairs to the office. Or depending on the cash can be used to make a vital, time-sensitive investment that can put the business in a superior position over its competitors. The bottom line is that in using a merchant cash advance, the business owner is able to access cash when he might need it the most.

As a point of clarification, this finance strategy is different from a bank loan. Here is how it works: The cash advance company purchases the client's future credit card sales, which is then converted to the amount of cash the client requests. From here, the company automatically deducts a set percentage from the business's credit card sales for a set time period. The key here is that as the business grows, so does its ability to repay the advance in a shorter amount of time.

This process also makes it easier for businesses to manage their account, more so if they are already swamped with their other urgent responsibilities. Any merchant cash advance company of good standing will also field a well-trained customer service team to guide their clients through the whole process, and to help them decide on a personalized, tailor-fit option that is advantageous for both parties.