Financial Advice Apr 21, 2022

5 Merchant Cash Advance Advantages for Online Business Owners

When you’re an online business, you have unique concerns and costs. However, you also face a lot of benefits that other businesses with a brick-and-mortar location don’t. Without the operational costs associated with having a physical location, you have extra resources to focus on improving your product, lead generations, and sales. To get your business to the next level, you may need an influx of cash that you can use to grow your current infrastructure, expand operations, or make new investments.

A merchant cash advance, or MCA, can help you do just that and can have more advantages than other business financing options. Here are the possible benefits your small online business could receive by getting an MCA.

Number 1: No Collateral (No Asset Backing or Effect on Credit)

A merchant cash advance is not a loan like you would get from a traditional bank. What you’re doing when you get an MCA is selling a portion of your future sales to the financier. They will give you a lump sum for that future credit card-based revenue. That means that getting approved for this advance relies on your credit card sales and sales history, not on the upfront collateral you provide.

Number 2: You Don’t Need Perfect Credit

Compared to traditional lending methods, the likelihood that your application to an MCA will get approved is higher than in other places, including credit cards. What makes MCAs even more convenient is that the application can be completed entirely online, and the process can be very quick if you have all the necessary paperwork on hand. Because good credit is not a requirement for approval, there is frequently no credit check done for this type of loan, making it ideal for those with bad credit.

What is vital for approval, however, is evidence that your business consistently makes sales with credit cards, which is the receivable the company will be getting a return on investment from. In many instances, MCA have almost guaranteed approval, making this perfect for those that need emergency cash.

Number 3: Receive Funding Fast

In a fast-paced market or in the face of special offers, you need a cash injection to take advantage of; you can use a merchant cash advance to get the money you need quickly. Depending on the scope of your application, the accuracy of your information, the company you work with, and the strength of your sales, you could receive funding instantly. In other cases, the application approval and funds transfer process usually does not take more than a week.

Number 4: Use the Funds However You See Fit

To reiterate, getting a MCA isn’t the same as getting a small business loan. Those loans often come with strict rules outlining how the capital you receive can be used. These rules include not being able to spend it on inventory, real estate, or covering other debts. With a merchant cash advance, you can use the funds for whatever your businesses needs currently are, like renovations, expanding operations and more.
Number 5: Flexible Payments

One of the major benefits of a merchant cash advance is that the payments are not fixed monthly or weekly payment terms. This can be great for online businesses as you will be remitting the investment, not paying back a loan based on an agreed percentage of credit card sales profits. If you have a slow month, you pay less and vice versa.

Get the Capital You Need Fast

The online world moves at a breakneck pace; you need a business loan that can get to you just as fast. An MCA can offer you the capital you need right in just a few minutes in some cases. Consider carefully how your business may use this cash injection to increase profits and grow your business.

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