5 Reasons Small Businesses Use Merchant Cash Advances

Merchant cash advances, or MCAs, are one of the more popular alternatives to traditional loans. Small businesses use merchant cash advances for a wide variety of purposes due to their flexibility and accessibility.

1. Loans may not be in the picture

Traditional lending channels have high requirements for loan programs. Many new and small businesses may not have the credit ratings or established revenue history to qualify for traditional loans. Similarly, small businesses may not want to take on additional debt and regular monthly payments. Fortunately, merchant cash advances are easy to get, and don’t require monthly installments to pay off the balance.

2. Flexible Payments

The monthly payments on traditional loans can place a strain on finances, especially during uneven revenue cycles. Merchant cash advances are repaid from a percentage of credit card transactions, so there is still cash flow even when sales are not that strong.

3. Merchant cash advances are reusable

Traditional loans are single-use. If more capital is required, a business must go through the application process all over again, have their credit ratings impacted further, and take on more debt. Merchant cash advances have fast closings and are not dependent on credit ratings, so if your business needs another infusion of capital, just get another MCA.

4. Discretionary Capital

Instead of single-purpose loans, merchant cash advances can be used for anything. Businesses use the capital from MCAs for everything from equipment to marketing, stocking inventory, paying down existing liabilities, or anything else that’s needed. New and small businesses need an all-purpose source of capital to maintain and grow operations to thrive in a competitive marketplace.

5. No Collateral Necessary

Unlike traditional loans that require businesses to put assets up in exchange for capital, merchant cash advances do not require collateral. Businesses can retain possession of their assets and equipment while still getting the capital they need.

At Growth Lending Group, we believe businesses should have a variety of options available when they need working capital, instead of being funneled into a cookie-cutter loan program. If you own a new or small business, and need extra capital with flexibility, contact our offices and learn more about our merchant cash advance program.

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