5 Ways Retail Businesses Benefit From A Merchant Cash Advance
Retail businesses usually have peak and down seasons. They must thrive by obtaining immediate cash flow support to sustain operational expenses during market fluctuations. Therefore, a merchant cash advance is a very practical funding option for many retail businesses.
What Is A Merchant Cash Advance?
A merchant cash advance is a flexible business loan for short-term business funding needs. This business funding option allows payment utilizing a sales percentage and a small fee. The repayments are based on the business’s monthly sales, enabling retail business owners to repay what they can afford every month.
Learn more about the basics of a merchant cash advance.
Benefits Of Merchant Cash Advance In Retail Businesses
Learn how retail businesses can benefit from a merchant cash advance below.
A Great Source Of Quick Cash
If you’re looking for quick cash, apply for a merchant cash advance. Many merchant cash advance issuers can get retail business owners the fund they need within 48 to 72 hours. In addition, they don’t require impressive personal or business credit standing because they focus more on credit and debit card sales.
If you have a good credit and debit card sales history, you can apply for a merchant cash advance to get fast cash. You can use the money to grow your retail business by purchasing more products to meet consumer demands during the peak season or opening more retail store branches in your state or across the country.
Promotes Better Cash Flow Management
Cash flow can quickly go out of hand if you have enormous overhead expenses. Retail businesses can barely recover if they also pay loans with increasing interest rates. Hence, a merchant cash advance is an excellent alternative to traditional business loans.
A merchant cash advance can support your cash flow instantly. The agreement usually lasts six months to one year with a fixed percentage. Unlike traditional business loans, a merchant cash advance doesn’t have an annual percentage rate (APR) and other hidden fees.
And because merchant cash advance repayments are directly proportional to retail sales, the amount may increase or decrease. For instance, if your credit and debit card sales decline for December, your loan repayment decreases, and vice versa. Hence, retail business owners can easily manage their cash flow.
Supports Retail Business Investments
A merchant cash advance can help retail businesses fund their investments to expand their market, streamline operations, and secure their inventory for long-term success. For instance, a retail business owner can apply for a merchant cash advance to fund the development of an e-commerce website.
One excellent option to improve your operations is robotic process automation (RPA), which automates repetitive, error-prone, and time-consuming tasks. Hence, RPA can optimize your accuracy, productivity, and customer satisfaction.
In addition, RPA tools help improve efficiency, productivity, business security, and customer service. Talk to an RPA consultant to streamline your business workflow and save time and money.
Helps Build Good Credit History
Banks and other lending institutions consider credit standing a significant factor when approving business loans. However, many startup retail businesses find it challenging to get a business loan because of zero or lack of credit history. If you’re a novice retail business owner, you can take a merchant cash advance to help build good credit history.
On the other hand, if you’re an existing retailer with previous credit rating checks, seeking the help of credit report services and taking a merchant cash advance can help improve your rating. That way, you can apply and get approved for a substantial loan with favorable terms in the future.
Provides More Flexible Payment Terms
As mentioned, the repayment scheme of a merchant cash advance depends on your total retail sales for the month. So, there’s a high chance that you can repay your debt quickly if you have consistently high sales.
Seasonal retail businesses can enjoy the flexible payment terms of a merchant cash advance because they can lend money only when they need it and repay the loan quickly. If your business sells Christmas decors, you can take a merchant cash advance to accelerate your production and meet orders for the holiday season.
A merchant cash advance can help retail business owners achieve better cash flow. It’s the fastest and most effective way to obtain funding for the immediate needs of retail businesses, such as tech investments and equipment procurement. If you want a merchant cash advance, it’s best to look for a reputable loan provider to help you attain your retail business goals.