Using Merchant Cash Advances
Your business needs an influx of cash quickly. Rough times have hit and you do not have enough inventories for a major holiday weekend coming up. You do not have time for a loan to be approved. What can you do? A scenario like this one or hundreds of others can lead back to using merchant cash advances. However, there are right ways and wrong ways to use merchant cash advances in your business. You do not want to incur cash advance problems as a result of making the wrong decision.
The old adage “it takes money to make more” is very true. This is why it has turned into somewhat of a cliché saying. It’s been used a lot to make a point. If your business does not have enough liquidity to purchase new inventory for a major weekend you could face losing the business. One good way to use merchant cash advances is to get inventory into your shop and repay the loan once you make the sales you know are coming. A good example of this situation would be Labor Day. This holiday in 2010 saw thousands of people in shops looking for great deals, and most years the same can be said.
You could also use a merchant cash advance for expanding your company. For example, you are being asked to put certain inventory in your store, but you do not have the room. Since you know consumers want the products you could get money for the expansion through a cash advance. Consumers will buy the new products as soon as they are in your store, thus you have the money to pay the loan back.
Business travel to find more consumers or vendors. You can use a merchant cash advance to get more consumers into your shop, either through the internet or obtaining more vendors. More vendors mean more products, thus more interest in your goods.
These are three of the top ways to use merchant cash advances. It is imperative to mention you should not use merchant cash advances in certain circumstances. Paying employee wages is not a good use of an advance. Wages are something you need to pay on a weekly, bi-weekly, or monthly basis. If you do not have enough to cover your employee wages it is doubtful in the coming months you would be able to pay the cash advance loan back.
You want to use merchant cash advances in instances that will definitely improve your company’s bottom line. In this way you know for certain that you can pay the loan back when it is due. Keep in mind what could help you increase your revenue as you think about cash advances.
