A merchant cash advance is an alternative lending solution which is primarily used with small businesses that have a consistently high volume of credit card sales, typically for companies operating as retailers or in the restaurant business. Instead of providing a loan to a company, a merchant cash advance delivers an upfront sum of cash to a business owner, in exchange for a percentage of future credit card sales.
Will your company benefit by a merchant cash advance?
One of the most common ways that a merchant cash advance is structured nowadays is to have fixed amounts deducted from your company bank account on a weekly or daily basis. Known as automated clearing house (ACH) withdrawals, these sums constitute the repayment to an alternative lender for the upfront lump-sum originally delivered. Once the advance amount has been paid off, the ACH withdrawals stop, and the transaction has been completed.
Advantages of a merchant cash advance
Although you have to be careful about the interest rates which are applied to your transaction, a merchant cash advance can definitely be advantageous to your business. If you need cash very quickly, this is a good way to acquire it, because it doesn’t involve a lot of significant paperwork, and the whole thing can be concluded within a week.
Since merchant cash advances are unsecured forms of alternative lending, there is no collateral involved in the transaction. This means that if disaster strikes and you are for some reason unable to repay the cash advance, you won’t really lose anything other than your good reputation.
If it turns out that your business sales take a downturn and your business is struggling for some period of time, the payment that you make to your alternative lender will drop right along with your business volume. Since your payment is always tied to a percentage of your credit card sales, you pay much less when your business is suffering, and you don’t have the added difficulty of making the same payment even in bad times.
Merchant cash advance with Black Wolf Capital Group
If your business typically does a high volume of credit card sales, you may benefit by arranging for a merchant cash advance. Contact us at Black Wolf Capital Group to discuss some options for putting cash in your hands immediately, while a merchant cash advance is setup for our mutual benefit.