Small Businesses and Merchant Cash Advances: All you need to know.
A merchant cash advance is a stupendous opportunity for small businesses to manage their cash flow in the first few years of their startup. Small companies can always opt for a merchant cash advance to maintain quick capital when they are not eligible for bank loans. Merchant cash advances can also save businesses with fluctuating revenue. Such advances have multiple edges since they are cut on credit and debit sales.
3 Pros of Merchant Cash Advance for Small Startups
Merchant cash advances are most suitable for businesses that possess only a $500 minimum credit note and have just one year of experience in the market. Here are a few edges to relying on a merchant cash advance:
- Flexibility
Instead of a fixed installment cut every month due to a traditional business loan, advances are flexible to pay back. Banks even risk small business assists, which costs them significant losses and ruins their market position and reputation.
Merchant cash advances are comparatively flexible due to the percentage scaling based on sales on credit// debit (depending on the lender).
Not all businesses make millions of profits. Such advances secure cash flow during the business’s slum seasons and unfortunate revenue dips.
- Anti-Risk
Your assets will not be at risk when you opt for MCA. Bank loans can cause tremendous collateral damage to the assets if your business cannot pay back. Your business will be free of personal liability and can excel over time.
- Quick
Merchant cash advances (MCA) take 2 to 3 days with minimum requirements, and documentation and application processes are more accessible and quicker than bank loans, which take at least 15 working days. One essential requirement for businesses is credit card payment access.
What about the Cons? (And the way around?)
Small businesses with over one year of experience can access merchant cash advances. Still, the business must have sufficient potential to grow and make higher sales to eliminate MCA instead of being stuck in a tornado of debt. One significant compromise/ investment small businesses must make for such advances is joining hands with an outsourced accountancy firm that can manage cash flow and finances with professional skill and experience. Accountants can keep track of budgets and recognize revenue daily. This way, the priority will be to pay back MCA and grow the business with wise decision-making. A reliable Merchant Cash Accounting team can help you stay in the safe zone and ensure the scalability of the business. As the business rises, small businesses will not have to hire more accountants and pay extra salaries and bonuses; outsourced accountants are already scalable, flexible and adaptable to such business situations.
Outsource Accountants Migitate Risks of Cash Advances!
Outsourced merchant cash accountants provide expert finance estimation, strategic planning, and analysis. They understand the intricacies of MCA repayments and debt levels and opt for less risky financing options. For exceptional outsourced accounting services, contact us to know more.
