Businesses, especially startups or those in the growth phase, are always looking for additional funding to achieve their goals. This is why merchant cash advance (MCA) is a great option. This type of financing allows businesses to access capital quickly for various business needs.
What Is MCA?
A merchant cash advance is very different from the traditional financing options like a bank. An MCA lender will go through your business’s credit card receipts to assess your creditworthiness. If you qualify, the company will give you the funding you need, which you will be repaying using part of your credit and debit card sales plus an extra fee. This type of funding is right for small businesses that need immediate working capital to manage cash flow or cover short-term expenses.
How Does it Work?
Once you qualify for this type of financing, the MCA company gives you a lump sum for your business needs. The money will be paid using a small percentage of the sales you make in the future. However, what makes this type of funding appealing to small businesses is that it takes a short time to get funding. This allows businesses to continue operations almost immediately.
Best Uses for Merchant Cash Advance
Merchant cash advance is very flexible in terms of the amount you get and how you repay it. Because of how easy it is to qualify, a small business merchant cash advance can be used for the following projects:
- Purchasing inventory: If you want to purchase supplies early, especially if they are at a discount, this type of funding can be beneficial.
- Temporary cash flow: If, for any reason, your cash flow is negative, an MCA can offer the funding you need to cover utility bills, payroll, rent, etc.
- Unplanned expenses: Maybe a piece of equipment you use to operate has broken down, or you have an emergency. An MCA allows you to quickly cover such expenses.
- Working capital: An MCA can provide you with the funds needed to cover the day-to-day operations if you have some financial challenges.
- Paying other debts: If you have other debts that may result in high-interest rates, or you want to pay suppliers to maintain a professional relationship, you can get an MCA for this.
Why an MCA Is a Good Option?
The biggest advantage of an MCA is that you will get the money you need for your business quickly. If you have a project that needs funding, consider this form of funding.
You will not need to worry about collateral, unlike most traditional financing options. Also, MCA lenders are not very strict about issues of credit scores. While they will certainly look at it, they tend to be more forgiving.
Now that you know what a merchant cash advance is, are you interested in this kind of funding? Get in touch with iKahn Capital. We are a financing company that provides alternative funding options to small business owners.
We have ensured that the application process is quick and effortless so that you get the funding you need to keep running your business. Give us a call today, and we will be glad to be of service.