“Merchant cash advances are covered by future revenues, which serve as collateral.”
What Is a Merchant Cash Advance?
A merchant cash advance is a sort of business funding that allows businesses to get the cash they want flexibly. The lender gives the company a cash advance, which it repays by taking a percentage of its customers’ card payments through a card terminal.
Merchant cash advances are ideal for a broad range of businesses that use a card terminal and can be more easily obtained than other types of business financing. A merchant cash advance is an excellent funding option for businesses with no or few assets, and those in need of capital for expansion but with a low credit score.
How To Use Merchant Cash Advance?
There may come a time when a short-term expense requires the use of more funds. Maybe you’re looking for a merchant cash advance since you need money right away. Or maybe you have a payment history that does not meet the requirements of a business loan. Whatever your reason for pursuing a merchant cash advance, you must do your homework. Here are the top six ways to use merchant cash advances in order to produce a favorable return.
Tips On Using Merchant Cash Advance
-
Expand Your Inventory
After all, in this era of next-day shipping and immediate downloads, we’ve grown accustomed to fast gratification.
As a business grows, so does customer expectation. While this is a wonderful thing, it might backfire if you are often running short of your most popular things or are unable to generate new ones. If you are unable to meet your consumers’ needs, you may lose them. A merchant cash advance can help you satisfy demand while also establishing a reputation for reliability. Which could contribute to growth in your customer base.
-
Handling Unpredicted Crises
In addition to financial crises, a merchant cash advance may help a business handle expensive challenges, such as equipment breakdown. Once granted a merchant cash advance, a small business may get funds fast and address the challenges that would otherwise be unaffordable.
-
Resolve Short Term Cash Flow Issues
If you need cash within a few days to meet an unexpected lump sum expense – such as an emergency repair – a merchant cash advance is the quickest method to obtain the money.
Small businesses may face short-term cash flow problems at some point, which can lead to serious problems for the business. This could be caused due to a client who pays his invoices late or the need to extend funds for inventory. With a merchant cash advance loan, you can obtain the funds you require to address short-term cash flow issues.
-
Hire New Staff
As your business grows, you will have to hire more people.
A company cannot work without people to run it, and a company cannot perform at its peak without the best ones on its team. This is why it’s critical to have a fully manned team on which you can trust if you want your business to be the best.
Whether your business is rapidly expanding or could just benefit from additional hands on deck to operate more efficiently, a merchant cash advance is an ideal method to secure the capital you need to bring on more employees. Depending on your needs, you can either hire individuals seasonally or permanently to help your business at a pretty challenging or busy period of the year. Or you can hire someone who will help your business grow throughout the year!
-
Launching Marketing and Advertising Campaigns
Nobody will buy from your company if they have never heard of it! Doesn’t that make sense? Despite this, a large number of businesses fail to implement quality marketing tactics to expand their reach and reputation. This is why initiating marketing and advertising programs is one of the most valuable uses of a merchant cash advance.
New marketing strategies can not only attract new clients but also convince existing customers about the high quality of your supplies and services. Increase your exposure by expanding your online postings, newspaper adverts, or whatever else works for your industry.
-
Introducing New Technology
Your potential customers and clients would want to know that your company is not fallen behind in terms of technology. In today’s era, technology is always evolving. It’s up to businesses to ensure that they do not fall behind in this race.
If a client is buying anything from you and observes you writing out their invoice, they may reconsider working with you! By staying updated on new technology, you portray yourself to your clients and customers as a dynamic company. They will notice that you are prepared to grow and evolve with the trends. As a result, they will trust you with their business.
SUMMARY
Unlike a loan, there is no requirement for collateral to back up the loan.
As you can see, there are numerous ways a merchant cash advance can be used. It can also be used to provide a business with an opportunity to earn way more money. Using a merchant cash advance is a sensible move, as long as you use it carefully. Especially, as an investment to grow your company, whether it’s staff, exposure, or modernizing.
At Hasanov Capital, we can help bolster business growth with a merchant cash advance or one of our other small business financing options. We are specialized finance and alternative funding platform that is privately owned and operated. We focus on providing capital access to small and mid-sized enterprises (Merchants) in the United States. Especially to those have typically been neglected by traditional financial institutions. And the ones who may have had trouble receiving timely funding. Get in touch with us today!
