Access to working capital is the lifeblood of any business. Unfortunately, it’s common for small and mid-sized business owners to struggle with cash flow issues. Whether you’re suffering from seasonal sales slumps, an unexpected expense, or other financial problems, a business merchant cash advance (MCA) can save the day. Here’s a look at some of the key benefits MCAs can offer business owners with cash flow problems.
Low Emphasis on Credit History
If you’re already dealing with financial issues, you may be glad to know that it’s fairly easy to get a merchant cash advance with bad credit. While a review of your credit history may be part of the underwriting process, it typically has a low impact on the approval decision. This can be a major benefit for business owners who have a low personal credit score or already have a significant amount of outstanding debt.
Eligibility for a merchant cash advance primarily depends on the amount of time you’ve been in business and the volume of your credit card sales. This can make MCAs ideal for certain types of businesses that have a high volume of credit card transactions, such as restaurants and retail stores.
Simple Application Process
Small business loans may require long, complicated applications and a lot of documentation, particularly if you’re working with a traditional lender or the U.S. Small Business Administration (SBA). In contrast, applying for a merchant cash advance is typically easy and straightforward, and can often be done online in just a few minutes. While you’ll still have to submit a few documents, such as your business bank statements and personal identification, overall, you can expect far less hassle when applying for an MCA.
No Collateral Requirement
Unlike some other types of loans, merchant cash advances do not require you to put down any form of collateral or offer a personal guarantee. While you do have to pay a percentage of your future credit card sales, there’s no other type of financial commitment. This can provide a lower-risk alternative to cash-strapped business owners. It may also make financing more readily available to small businesses or start-up companies that have not yet amassed enough assets to use as collateral for a loan.
Flexible Repayment Terms
One of the primary advantages of a merchant cash advance is that there are no fixed monthly payments. Instead, you pay the provider a percentage of each future credit card sale. When your sales go down, your MCA payments go down proportionately. This can help you get through slow months without placing additional strain on your cash flow or creating concerns about going into default.
No Restrictions on How You Can Use the Funds
Some business loans place limits on what you can do with the money. However, a merchant cash advance can be used for virtually any purpose. When your business cash flow is tight, you may need the money from your MCA to meet your payroll obligations, purchase necessary supplies, consolidate debt, or even pay your taxes or other outstanding bills. The flexibility MCAs offer can help a business stay afloat long enough to fix its cash flow problems.
Fast, Hassle-Free Funding
When you need cash to run your business, every day counts. You don’t have time to wait weeks for a lender to review your application and make a funding decision. Many merchant cash advance providers offer same-day approvals and fast funding. For example, Zinch typically makes an approval decision within 24 hours and provides funding within 48 hours after you’ve been approved.
While traditional lenders may require you to visit a local branch to close on your loan, most alternative lenders do everything online. Once you’re approved for your business merchant cash advance, you can expect to have the funds deposited directly into your bank account, so you can start dealing with your cash flow issues right away.
Get Prequalified with Zinch
Don’t let cash flow problems derail your business. A merchant cash advance may be the perfect solution, and you can get pre-approved with Zinch in less than three minutes! To learn more about your business financing options, contact us at (714) 500-6622 now. You could qualify for up to $250,000 in just 24 hours.
