Merchant Cash Advance and how Veritas plans to educate our borrowers.
Small businesses rely on cash flow for success as much as any giant corporation. The major differences between the locally owned shops around every corner and the national retail chains are the size of the capital requirements and the methods available to secure funding. Our nations top businesses often rely on vast pools of collateral based lending sources and with buildings and equipment stretching across multiple locations a steady money stream is relatively simple to maintain.
One of the most popular methods small business owners are using to overcome the difference in assets is the Merchant Cash Advance Loan. In many instances, the ability to make quick decisions with fewer delays and tiers of management are what lead to the success of local businesses, but the shortage of a stockpile of hard assets to pledge for capital needs sometimes results in cash shortages during expansion, hiring or slow seasons.
Many businesses that fail are caught only a month or two away from the end of a down season or temporary drop in sales. With the brilliance behind Merchant Cash Advances, “MCAs”, the burden of a conventional loan is replaced by a repayment plan directly proportional to sales revenues. Never before has a lending product been automatically scaled to fit business swings without causing any penalties, late fees or excess interest.
Merchant Cash Advances are not a loan. It is the process of borrowing against future credit card sales and is paid back at a pre-agreed percentage of each transaction. The process of utilizing the system to gain access to cash without impacting credit ratings or requiring the pledging of assets for collateral is one of the fastest growing sources of funding throughout the nation. There is not a constant monthly payment required during the repayment of the amount borrowed, and the payback system is perfect for businesses that have slow and peak seasons.
Science Behind MCAs:
If peak business trends result in 100 credit card sales in the height of the selling season and 20 charges in the slowest months, the payments will never change. Burdens customarily placed upon the business by the same monthly mortgage during the slow season are eliminated. In a business environment where there is no shortage of everyday stresses, the Merchant Cash Advance spreads the payback to each transaction to make lifting as easy as sliding a customer’s card.
The “bread and butter” Money Solution
Now there is a solution that minimizes the overall strain of worrying about a huge monthly mortgage installment during the occasional “off” month. Previously a downturn in sales would result in a sprint toward the panic button and a dreaded phone call to the bank. Many merchants simply deduct the percentage from each transaction used for repayment for budgeting and planning purposes and barely notice the difference.
After the balance is paid, it is like a windfall of extra revenue. As with most phenomenon perception becomes a reality and when each sale is consistently adjusted downward, it becomes the new standard. Allowing a method for repayment with minimal discomfort to the pocket book is the equivalent of a pain free injury for small business funding. Both of the processes make it easier to smile.
Merchant Cash Advance Loans – Interest Over Time Worldwide- Past 5 Years – Source – Google Trends
I haven’t been in the industry for a lifetime but finance is my life and I am happy to be a part of a business where Merchant Cash Advance is a solution to over 90% of small businesses that need cash flow immediately and with that cash flow that they couldn’t find before, they can grow their businesses, get more inventory, equipment, staff, expansion, etc. It is equally as important to have a professional look into your margins and make sure that is the best route for you. Do not listen to people trying to stuff cash down your throat. Listen to professionals that can teach you how to grow your business using their capital at a benefit to you and the lender. At Veritas we believe in educating our clients and helping them through every step of the way. Not just getting a loan but helping them grow their businesses.
If you have any questions feel free to reach out to me at [email protected]