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Merchant Cash-Advance Questions Business Owners May Need Answered

Finance & Money Blog

Meeting the financial needs of a growing business can be a tremendously difficult task for most people to do. For business owners that are battling to meet their enterprise's cash flow needs, a merchant cash advance can be a great solution.

Why Would Your Business Need A Cash Advance?

Often, there are enterprises that may experience dramatic swings in cash on hand. This can be particularly common for businesses that have relatively slim margins on their products or services. In these instances, it may be difficult for these enterprises to meet their ordering needs and debt obligations. A merchant cash advance can be an affordable option for generating the funds that you are needing to meet your enterprise's immediate needs. Additionally, these cash advances can be a great solution for meeting emergency situations, such as needing to replace an expensive machine.   

What Is The Process Of Applying For A Commercial Cash Advance?

Some business owners will be worried about the process of applying for a merchant cash advance. This can be a particularly common for those that own relatively new businesses, as they may be concerned about a lack of positive credit history. Fortunately, this is not a major concern in many instances, as there are lenders that will primarily focus on the monthly revenue that your company has been generating, as the final amount of capital that is loaned will be based on a percentage of these revenues. For businesses that are too new to have an established history of revenue, the credit history of the primary partner or owner will be considered.

How Do You Pay These Cash Advances Back?

Repaying any type of loan can be a somewhat intimidating task. Yet, merchant cash advances are relatively simple to pay back. In fact, many of these lenders will make an arrangement with your company's credit card payment processor so that a set percentage is withheld to pay back this loan. This percentage will be withheld until the cash advance is repaid. For lenders that do not offer this type of repayment structure, you will need to make a series of installment payments as you would with a traditional loan.

Taking out a cash advance for your business can be a great option for ensuring that your enterprise has the funds needed to meet its spending needs during financial shortfalls. By appreciating the situation where these loans can help your business, the ease of applying for this financing and the way that you will repay it, it will be easier to understand the way that this source of capital can fit into your business's financial strategy. Contact a lender like Fordham Capital for more information.


28 December 2016