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When considering financing options for your small or medium-sized business, a merchant cash advance (MCA) may seem like the perfect alternative to a traditional business loan. While there are certainly many benefits to this type of lending choice, there are also some cons to keep in mind when determining whether an MCA is right for you. Learn more about pros and cons of a Merchant Cash Advance.

Benefits of Merchant Cash Advance

PRO (Benefit):  MCAs are available to those with poor credit

Business loans typically require a business owner and business to have good credit ratings. On the other hand, merchant cash advances consider your future sales projections, not your credit history. Since MCAs are repaid using future credit and debit revenue, a poor credit rating and collateral aren’t relevant to the lender.

PRO(Benefit): MCAs get you cash faster

The approval process for a merchant cash advance is much quicker than a business loan. In some cases, a business owner can have the money requested in their bank account in less than 48 hours.

Cons of Merchant Cash Advance

CON: Lenders are unregulated

The MCA industry is largely unregulated, which makes it possible for some lenders to charge hefty interest fees and take advantage of their customers. Be careful, read reviews, and ask questions of your lender before you decide on a merchant cash advance.

CON: Daily deductions can hurt cash flow

Repayment of a merchant cash advance occurs by deducting funds from credit card receipts, sometimes on a daily basis. Make sure to check with your MCA provider the repayment details of the plan you are signing up for.Merchant cash advances are an alternative lending method for small business owners who need cash fast and may not have the collateral or credit to get bank loan approval. However, before you apply for an MCA, make sure you do your homework, ask questions, think about pros and cons of a Merchant Cash Advance and if you need advice on alternative lending solutions, we are always here to help.

With COVID-19 vaccines being administered all around the world, it's only a matter of time that businesses resume their work in the field. While corporations will have little to no hurdles, it will be small businesses that will have to make more effort. You don’t need to be an expert to understand these issues in today's economy. Some help in reopening will allow any sort of company to see instant results if capital is invested and used effectively. This is where merchants cash advances come in. An MCA works very differently. You’re receiving funding from a financial solution business. However, the perk of getting an MCA is that you only have to pay it back from a percentage of your sales. If you aren’t making any sales, you won’t have to pay back anything. So, if that doesn’t sound like a reasonable enough argument to make you get an MCA to nudge your business in the right direction, let us continue. Here are five reasons why cash advances will work in our company’s favor.

Easy to Qualify

Today's economy makes it troublesome for businesses in terms of finance. Conventional loans have rigid requirements that are turning people away. Moreover, they take more time, and sometimes your request may be denied. Merchant cash advances are more viable as they offer a sum of money at a fixed rate, and are easy to qualify for, even for first-time owners. While bank loans require hours to fill out, these applications contain brief questionnaires, prioritizing output rather than processing information. Expand Office Space Upgrading your office will be one of the heftiest investments you’ll ever make. But, it’s a necessary one. If your office space no longer meets the requirements of your business, you have to move into something that’s more fit to your needs. However, it’s not cheap. Moving into a new office requires a ton of money upfront. An MCA can be a great way to complete the down payment and move into the new office.

Quick Funding

Traditional bank loans have an approval time for weeks, and it is not even certain if your application will get accepted or not. If you don’t want to get caught up in those waiting times, an MCA is the best option. Funds from an MCA could reach your account the same day as your application is submitted!

Works Despite Credit Score

There are cases when businesses are in a stable situation and may have a poor credit score. In such cases, qualifying for a loan is impossible as banks want a surety that you are a viable candidate for receiving money. A history of bad credit is a red flag that tells a bank you won’t be able to repay the loan. An MCA gives you a much reliable alternative for cases where credit scores are low. There will be some things that will change but you will still be entitled to receive a cash advance!

No Restrictions

With bank loans, there are a ton of rules and regulations that restrict you from spending your money on certain places. With an MCA, there’s no such limitations. You’re free to invest your advance into anything as long as it helps in the growth of your business. An MCA can help elevate your operation to new heights with greater flexibility and opportunities. If you’d like to learn more about obtaining a merchant cash advance for your business, 2M7 Financial Solutions is here to help. We offer merchant cash advances to businesses in all industries and of all sizes. Gain an edge over your competition and contact us today.

Many business owners have trouble accessing traditional business loans. If you’re one of them, you may be wondering about alternative funding solutions. One of those solutions is the merchant cash advance, or MCA. Some businesses benefit from Merchant Cash Advance more than others. If you’re in one of these industries, MCAs could be the right choice for you.

Restaurants Need More Flexibility

Many restaurants face huge ups and downs, making their income somewhat unpredictable.If you already accept credit cards, merchant cash advances are a great way to secure flexible funding. MCAs could also help you invest in kitchen upgrades or follow up on trends like food trucks or local eating. You might even be able to open a second location to keep business growing.

MCAs Help Auto Repair Shops

Traditional financing can be risky for an auto repair shop. If you fall behind on payments, the lender might decide to collect on the loan collateral. That could mean the loss of expensive equipment or even your garage space.Merchant cash advances let you keep working without fear of the debt collector. Payments are based on your credit card sales, so there’s no need to worry about missing a payment.

Specialty Retailers Benefit from Merchant Cash Advance

Retail is another industry with slim margins. Specialty retailers face even slimmer margins, often because they’re selling to a small crowd.MCAs could help you weather the ups and downs. They could also help you upgrade your space or move to a more attractive one, so you can be where your customers are.

Is MCA Right for You?

Merchant cash advance has benefits for many different businesses. If you think it might be the right solution for you, get in touch with us. We can help you explore all financial solutions for your business.