Merchant Cash Advance Could Cure Stimulus Cash Flow Problems

If you think a merchant cash advance isn’t for you, hold that thought. The long-awaited stimulus plan has been presented and passed by Congress. The American Recovery and Reinvestment Act of 2009 may hold some nasty cash flow surprises for small businesses however. The package sets aside nearly $25 billion to subsidize health care premiums for recently discharged workers. The new law calls for a 65% subsidy in COBRA payments, but the actual cash comes from the employers themselves.

Under the new law, employers can deduct the 65% premium from their federal payroll tax deposits, but the up-front cash comes from the employers themselves. If you’ve recently laid off employees, or plan to do so in the near future, and those employees have health care benefits, you could be fronting the COBRA subsidy for your employees. Further, if the COBRA subsidy exceeds your payroll deposit, you’ll need to request reimbursement from the Treasury Department. You guessed it: the reimbursement policy is not yet in place.

Health care premiums are expensive, and COBRA payments for separated employees could cost your business thousands of dollars each month. If you experience a sudden cash flow problem, how will you pay your monthly COBRA payments?

A merchant cash advance can give you the cash you need to cover COBRA payments, payroll taxes or unexpected expenses related to your business. And a merchant cash advance is fast, too. Rapid Capital Funding can arrange a merchant cash advance in a matter of days. With a bank you could wait weeks or months for loan funds.

In a recession, the difference between survival and failure is cash. If your business doesn’t have the cash it needs, contact Rapid Capital Funding today and let us show you how we can help.

Photo Credit: Wojciech Wolak

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