How a Merchant Cash Advance Can Help Grow Your Small Business

Ezra Cabrera

Updated: August 5, 2019
merchant cash advance

Does your business need quick access to working capital? Bank loans are usually the first thing that comes to mind when entrepreneurs need more funds for their businesses. But traditional loans take time, and truth be told, they’re harder to qualify for. If you need fast cash for unexpected expenses, then you don’t have the luxury of waiting. During desperate times, a merchant cash advance (MCA) is an option you may want to consider.

Related: 5 Reasons to Apply for a Merchant Cash Advance for Your Small Business

An MCA is one of the best financing options available if you need fast cash. The application process is speedy and simple so, you don’t have to provide collateral, or submit countless documents to prove the financial health of your business. Depending on the lending company, you’ll be able to receive the funds in as fast as 24 hours.

By using the funds from an MCA, your business will have the potential to grow. Here are some of the ways on how you can use an MCA for the advancement of your business.

1. Improve Advertising Strategies

You can’t grow your business without customers. When it comes to attracting and retaining customers, you need to establish good marketing and advertising strategies. You have to make your business desirable to the people so they will have a chance to go back to you and purchase your products or avail your services.

However, advertising and marketing strategies cost money. You’d need to hire a team to put it together. This means you’ll need to have additional fees and add more people to the company. Without extra cash, you won’t be able to accomplish that. With a merchant cash advance, on the other hand, you’ll have enough funds to cover the costs of advertising and marketing.

2. Hire More Employees

As your business grows, you may need to hire more employees in order to accommodate an increasing number of customers. Adding to your staff means additional payroll and overhead costs. You’d have to pay the staffing company, insurance, and their salary. When these are all added up, it could cost a lot.

With an MCA, you’ll be able to hire extra people for your team, accommodate more customers, and process orders as quickly as possible. The extra cash will provide flexibility so you can accomplish more in your business. The more you invest in your business, the better your chances of success will be.

3. Credit Rating Remains Unaffected

Unlike traditional loans, applying for an MCA will not affect your business’ credit rating. This is because technically, an MCA is not a loan. Lenders give you a cash advance and you repay them by giving them a percentage of your future credit card sales.

As mentioned, credit rating is not an important factor. So, unlike traditional business loans, you don’t have to spend time improving it before you can qualify. In fact, you might even improve your credit score through MCA, given that you pay your debt on time.

Related: 6 Ways to Improve Your Business Credit Score

4. Purchase Equipment

MCA is also helpful when you’re planning on replacing broken equipment in your business. It goes without saying that high-tech and large pieces of machinery can cost a lot. It could also create a huge cash-flow gap when you finance it out of your pocket. That’s why when you need to purchase other equipment, you have to consider applying for a merchant cash advance.

You can use the funds to purchase just about anything your business needs. Whether it’s basic office equipment such as computers, tablets, machinery, or high-end equipment, like cars, you won’t have to worry about its price when you have secured an MCA.

5. Pay for Unforeseen Expenses

Anything can happen when you’re running a business. Equipment breakdowns, seasonal sales, natural disasters, theft, and numerous other factors can suddenly go wrong in the world of business. In times like these, you have to be prepared for the worse to come.

This means, preparing your business financially. When unforeseen expenses arise and you don’t have enough cash reserves on hand, a merchant cash advance is an ideal go-to solution. With the extra cash on hand, you can replace broken equipment, repair damages brought about by a calamity, or even help your business stay afloat during an economic downturn. All these become easy with the help of a merchant cash advance.

Merchant Cash Advance for Small Businesses

A merchant cash advance has helped countless business owners in the United States, and it can help you, too. With the many expenses, you have to consider in a business, it can be difficult to come up with an amount enough to cover all the costs. With a merchant cash advance ready, you won’t need to worry about how or where you will get the cash you can use for your business expenses. At the very least, it can make running your business easier and smoother.

Ezra Cabrera
Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.

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