Being a businessman is not easy, you face several difficulties. Profits and losses are the daily doses of your work. There are times when you need instant cash for your business for growth or particular investments. A merchant cash advance is one of the methods to obtain instant cash. It also abbreviated as (MCA). It is a process, a sort of loan but quite different from general bank loans. You don’t need any collateral or any high credit score to get this advance cash. All you need is good sales if your business venture is running well and produces good sales monthly or weekly basis it is very easy to get such type of payment. You can apply for this payment and based on sales you will be given the amount you can get accordingly, the repaying process is rather simpler. You need to pay back from your sales mainly daily or weekly which is calculated beforehand you are given the money and divided for the period until you pay all of it back. There would be fees and kind of so-called “factor” which will be affixed to you accordingly based on you amount taken as the merchant cash advance
It depends on the nature of your business and the size of your venture completely. It is true, that merchant advance cash gives you an instant inflow which you require, it does not put you into a lot of pressure as your repaying it by your sales daily or weekly. A businessman who has a stable sale with less fluctuation, this deal is comparatively profitable. It doesn’t give you into the pressure of making the repayment with a huge interest at one set like in that of bank loan plus it’s not a long process when it comes to applying for it. You get flexible repayment for merchant capital mainly based on your daily sales. You can invest this money in any business venture of your own choice.
But, as it is said a coin has two sides so is this deal. For businessman who has season based business or one with a fluctuating income, it is not such a good deal. The costs and the factor by which money has to be replayed are quite high as compared to many other pans as such. If you have a small business or have just started and don't have a steady income it can be a bad idea, an irregular cash inflow may lead you into debt or in a financial crisis, further making you to taking another loan.
So, it completely depends on the nature of your business, the size of your venture if it's a good idea to take a merchant cash advance. Furthermore, it's a good source of instant cash and is useful for a lot businessman out there
I hope this might have helped you and may have given you the basics about merchant cash advance. Besides this, there are lots of other business loans that have less cost than merchant cash advance Thanks for reading!!!!