As we close in on 2021, businesses have now been struggling to deal with the effects of the COVID-19 pandemic for nearly a year. The shifts in consumer needs, restrictions and operating requirements have left the majority of business owners short on cash – and with no clear picture of what the next 6 months might hold.
The answer? Many business owners are finding the access to the cash they need from an alternative funding source that has been around long before the pandemic: the merchant cash advance.
What is a merchant cash advance?
What is a merchant cash advance, and why are so many small to medium-sized companies using this funding option? Essentially, a merchant cash advance provides a quick way for any business that accepts credit or debit cards to secure quick capital. The lender provides a fast infusion of cash, and the repayment is taken as a small percentage of future card sales.
In addition to the speed this option provides, another huge advantage is that the business only repays the cash advance when it receives card payments from customers. This means during slower months, the business pays back less. When they are busy, they pay back more. For businesses dealing with slower months due to COVID-19 restrictions, this flexibility is a great relief.
How a merchant cash advance helps
This type of financing can be used for whatever the business needs the funds for. For example, businesses can use the cash to fuel the extra time and resources needed to adapt the services and products they offer. It also provides the flexibility they need to adapt and revise as necessary to survive the rapidly changing market conditions. Many businesses also use this cash to increase inventory, cover payroll and fulfill orders.
Where to find a merchant cash advance
Even before COVID, it was incredibly difficult for many small business owners to secure financing; the current situation has simply complicated things further, while also increasing the number of businesses needing funding. Some of the top reasons traditional lenders decline merchants for loans is due to non-sufficient funds (NSFs), too many overdrafts, poor credit, reputational risk or high chargeback rates.
If your business has hit a roadblock due to one or more of these issues, you’ll be glad to hear there are lenders out there that are more than happy – actually specialize – in helping businesses like yours. The secret is to partner with an industry-leading high risk provider. These lenders specialize in working with high risk merchants and have developed services and products tailored to meet your unique needs.
Author Bio:- Michael Hollis is a Detroit native who has helped hundreds of business owners with their Alternative funding solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.