Small and medium enterprises can benefit more from increased cash access for growth or inventory restocking. Merchant cash advance loans are an excellent solution for businesses with no credit history or collateral to apply for a conventional line of credit or business loan. Here are the advantages of merchant cash advance loans for small and medium businesses.
An Ideal Source of Quick Cash
Small business owners who require cash should seek a merchant cash advance. Most cash advance issuers give business owners the money they need within 48-72 hours. The funding doesn’t require an impressive business or personal credit standing as it focuses more on debit and credit card sales. Business owners with an excellent debit and credit card sales history can apply for the advance to secure fast cash.
It Helps Improve Good Credit History
Lending institutions, including banks, assess credit standing when approving a business loan. However, most startups find it challenging to secure a business loan due to a lack of credit history. Novice retail business owners can secure a merchant cash advance to establish an excellent credit history. Existing retailers with past credit rating checks may seek help from credit report services and secure funds to improve their ratings.
Flexible Payment Terms
The repayment period of a merchant cash advance varies depending on the total sales each month. There’s a high chance of repaying the debt quickly if the business makes high sales consistently. Seasonal retail companies have flexible payment terms when servicing a merchant cash advance as they lend money when needed and pay off the loan quickly.
Lower Risk
The merchant cash advance has a minimal default risk for the client and the bank. This happens because the repayment adjusts depending on the company’s cash flow. Hence, your business pays more interest and takes longer to clear the loan if it experiences poor sales. Formal restructuring is optional as the loan will restructure itself when required.
Sustains Retail Business Investments
A merchant cash advance enables retail businesses to expand their markets, fund their investments, secure inventory, and streamline operations for long-term success. Retail business owners can secure a merchant cash advance to fund an e-commerce website. You can use robotic process automation (RPA) to automate error-prone, time-consuming, and repetitive tasks to optimize productivity, accuracy, and customer satisfaction.
A merchant cash advance enables retail business owners to achieve an excellent cash flow. Contact a financial expert from Artis Commercial Capital to secure funding for the immediate needs of your business, such as equipment procurement and tech investments.