Most types of businesses may require an additional source of capital at some point. While the already established enterprises may not suffer major financial problems, the small startups sometimes experience major financial blowups. Although financial institutions offer many types of loans to entrepreneurs, most businesses do not qualify, and that is where merchant cash advance (MCA) comes in. MCAs are lumpsum advance payments which the borrower gets according to how they use the credit card. Basically, MCA is not a type of loan, but the borrower repays it alongside a fee. If your business requires a temporary financing tool, cash advance would be an ideal solution. It can help you settle your various business needs, such as unexpected cashflows gaps.

How It Works

The business cash advance offers the money to the borrower in a lump sum. The borrower, in return, repays the money with an additional fee, which they agree upon before the disbursement. The lender does not consider your credit history. Some lenders, too, do not ask for collateral, since the funding is unsecured. Merchant cash advances do not have regular monthly repayments. Instead, the borrower makes daily or weekly payments depending on their credit sales. The lender can also get the payments through automatic payments from the borrowers’ bank accounts.

Business Cash Advance Benefits Which Help To Improve Cashflows

Straight Forward Application

The process of applying for a merchant cash advance is easy and straight forward. The application form does not require the borrower to fill lengthy details. Besides, borrowers apply online, meaning they do not necessarily have to visit the bank for the application. The approval process starts immediately, and the disbursement takes place within a few business days. After the approval, businesses can withdraw the cash directly from their bank account.

No Loan Usage Restrictions

Many business loans have strict rules regarding how the borrower should use the money. For instance, you cannot use some loans to pay off existing debts or purchase inventory. Such loan restrictions make it hard for you to settle your immediate business needs. Merchant cash advances are flexible, meaning you can use the cash you receive for different purposes. Such financial freedom allows you to focus on activities that improve your cashflows.

Business cash advances are not suitable for all businesses. They are, however, ideal for small businesses, especially those who do not qualify for bank loans. If several financial institutions have turned down your application, a business cash advance could be the best resource you need to keep your business going.