How To Know When It Is Time For A Merchant Cash Advance

You’ve recently started a business, and the first hurdles have been overcome. But now, you need some extra cash to increase inventory and handle unexpected expenses. There’s no reason to be too anxious about merchant cash advances – they are a completely normal part of business operations and give you options when it comes to financing.

Before looking at some good reasons to apply to one, let’s go over what they are.

What is a Merchant Cash Advance?

A merchant cash advance is an unsecured business loan primarily used to overcome short-term financing issues. They can be granted in as little as two days and are repaid through the future sales and receivables of your business. They work by taking a percentage of the daily or weekly receivables of a company. You can learn more by exploring the OnVision Capital® Merchant Cash Advance.

1.  You Need More Inventory

Probably the most common reason for a merchant cash advance is purchasing more inventory to keep shelves stocked. You need to make sure the supply is there to meet demand, and for most businesses, it can be hard to predict what the demand will be when it comes. That’s why having a lot of merchandise in stock is crucial to keeping customers happy.

2.  During Difficult Times

The most common difficulty for a business is a slow season. Lots of companies have busier and slower times of the year. Therefore, these months of the year can impact available cash.

If you know the gap in sales is due to a seasonal decline, that’s a perfect reason to get the money you need to survive advanced upfront and pay it off when the busy season comes again. Short-term merchant cash advances can help tide the business over during these financial dry spells. Because these advances have flexible repayment options, you can pay based on a percentage of daily or weekly receivables.

3.   When you need to Refurbish

Depending on the level of renovations you are planning for your store, a merchant cash advance can cover small-scale renovations like a new sign, shelves, or furniture. This is also an excellent option for online businesses looking to get their online storefront updated. Especially when there is an unexpected expense, a merchant cash advance to cover the gap in an otherwise thriving business to help it stay afloat during times of unforeseen problems.

Getting Started with a Merchant Cash Advance

It’s never a bad time to find out more about whether a merchant cash advance is right for your business. They are prevalent amongst small businesses and form an integral part of many businesses’ lifecycles. Whether it’s scaling up your inventory, getting renovations, or dealing with a short-term drought in customers, there are countless valid reasons to get one.

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