Thinking About A Merchant Cash Advance?

 

If you’ve never gotten a merchant cash advance before, you probably have some questions about how the process works, and the potential risks and rewards of working with a merchant cash advance provider. The truth is that merchant cash advances are growing at a double-digit rate as small businesses look for ways to shore up their cash flow, or get financing that banks and private lenders won’t provide.

 

Ideally, merchant cash advances work best for businesses that have a lot of credit card transactions. These businesses include bars, restaurants, retail outlets, and personal service providers like dentists and hair stylists. The cash advance, which is usually capped by the amount of monthly credit and debit card receipts, is paid back over time (often a period of months). A small amount of each credit card transaction is forwarded to the advance company to repay the advance. Normally, the advance is paid back as a percentage of sales volume, so when sales are down, the repayment amount also decreases.

This is great for businesses that need a healthy cash flow to remain in operation. Merchant cash advances can be used for just about anything – paying bills or taxes, shoring up cash reserves, covering unexpected expenses, financing an expansion or just about anything else you have in mind. There are no monthly bills to pay – the repayment occurs as credit card transactions are processed.

It’s important to understand the agreements you enter into when you accept a merchant cash advance. Most business owners who have gotten a merchant cash advance report that they are very satisfied with the transaction. Some businesses have an advance agreement that works like a line of credit, so they can draw on cash whenever they need to. Other merchants use merchant cash advances only for those occasions when they need cash immediately.

Rapid Capital Funding can help you secure a merchant cash advance for your business. If you’d like more information about how a merchant cash advance can work for you, contact Rapid Capital Funding today.

Photo Credit: Lotus Head

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