In times when your cash flow is restricted, getting access to finance can mean the difference between staying afloat or going under. It’s especially important to get cash quickly so that you can continue to pay bills until you’re able to bring money in again.
A merchant cash advance is a great alternative to a loan when you need quick access to cash, allowing you to turn future credit card sales into working capital. Here are five reasons why working capital financing is so useful right now.
1. Working capital financing is approved quickly
Because a merchant cash advance provider doesn’t assess your credit score in the same way a loan provider would, you can get your cash much faster. In some cases, the cash can be in your bank account in as little as a week, allowing you to keep trading.
2. There are fewer restrictions when applying for a merchant cash advance
With a merchant cash advance, you don’t need to specify a purpose for the money. While you can’t use it for the purchase of assets or long-term funding of your business, you can use it for multiple payments. It’s especially useful for paying your ongoing bills and staff paychecks.
3. Working capital financing allows you more control
Because you don’t need to specify a purpose for your merchant cash advance, you have more control over how you spend it than you would with a traditional loan. You also won’t have to worry about the restrictions and expectations that a bank would have. When cash flow is reduced, this can be a real lifeline, allowing you to use the money however you need in order to stay afloat.
4. Merchant cash advances can be paid quicker than a loan
Merchant cash advances are can easily be paid off quickly. Because it is a stop-gap measure intended to tide your business over until cash flow picks up again, it can be paid off without spending years accruing interest.
5. Working capital financing needn’t be a burden on your expenses
Working capital financing is repaid by a holdback. This means that when you make credit card sales a set percentage is held back by the cash advance provider. This means that if your credit card sales are down during a particularly bad month, you won’t pay as much.
Is your business in need of a little extra help during tough times? Working capital financing is one of the best ways to ensure short-term cash flow for your Anchorage business. At Cornerstone Credit Services, we have been offering working capital loans for years. We would love to help you get started, so please get in touch.