When should a small business owner decide that a merchant or business cash advance is an appropriate fit for their needs? When is it the wrong choice? Let’s review a few hypothetical situations.
“A merchant has a low bank balance before payroll.”
This is the perfect moment for a small business owner to seek a business cash advance. A quick injection of working capital within a day of applying can help with unexpected payroll numbers. Missing payroll could cause loss of employees and disruption in production.
“An owner needs cash for a personal expense.”
In this instance, leveraging your sales with a business cash advance is not ideal. Mixing personal expenses and company profits can hurt business growth prospects and possibly cause turmoil within the ownership group. Working capital that is received should be reinvested into something that will help show profitable returns.
“A competitor has gone out of business and is selling inventory.”
In rare opportunities that a business can both acquire cheap inventory as well as take over market share, it can be very important to have quick working capital on hand. A small business cash advance is a prime way to be able to get the cash you need to execute on this business opportunity.
“A new business is trying to purchase a building for operations.”
When establishing a new business, land and building space are typically the most expensive costs. The best method to find funds for this would either be personal funds or a Small Business Administration loan. A business cash advance is not a good option, because there are no sales in this instance to leverage for an advance.
“An Italian restaurant’s dining room furniture is in need of replacement.”
A small business cash advance on future sales, is perfect for a situation like this. Restaurants have a constant flow of money in and out of their accounts and being able to find working capital to make a necessary change can be quite hard. Liquidating future receipts may be the only way some restaurants will ever be able to get that much cash on hand.
At Merchant Cash Group, our goal is to create customized funding solutions for your business. Unlike other businesses, we will never offer a merchant something that would be harmful for the health of their business. MCG funding specialists are trained to analyze a merchant’s needs and find the perfect opportunity for them. If you have any questions about these scenarios, or you’d like to reach one of our funding specialists, please contact us today!