Creative Ways to Optimize a Business Cash Advance

April 4, 2018 Simon Hopes | Comments Off

There are almost 7.5 billion people in this world. It is no surprise that a small percentage of this audience open up a business and make it grow. However, not all startup businesses are successful. In fact, only five percent of them survive, and the future for these five percent is unknown.

If you’re one of these five percent, you will undergo the business life cycle. You will experience the highs and lows of the business operation. When businesses are in their declining stage, the business owners will look for ways to save it. They usually look for innovations. Sometimes they have to change their marketing strategy. Of course, funds are needed to carry out the strategy.

For this reason, this is also the time when business owners will usually ask for loans or credits. But what if you have an impaired credit rating? Does it mean that you don’t have any means of funding at all?

What Is Business Cash Advance?

Thankfully, there is a small business funding option called business cash advance.  Business cash advance is also known as merchant cash advance. It provides working capital for businesses with low credit rating.

However, a business cash advance is not a form of a loan. The merchant cash advance company will give a lump sum of money to the business owner and will receive the payment from the percentage of future debit or credit card sales. The common method of payment is through automatic repayment in every business day.

Features of Business Cash Advance

Businesses who are not qualified to apply for a loan in the bank are the ones who benefit the most in merchant cash advance. Businesses with impaired credits can avail the lump sum from merchant cash advance.

The repayment is flexible. The amount of payment is a percentage of your debit or credit card sales. You will continue paying until you fulfill your payment obligation. For this reason, you don’t have to worry paying for a fixed amount even if your business is not doing well.

How to Maximize the Benefits of Business Cash Advance

  • Use it only for your business.

Use the business cash advance to purchase the necessary machinery and equipment for your business. Do not use it for personal necessities and luxuries. Use the money to enhance the performance of your services and the production of your products.

A Business cash advance is not a loan, but you also have to consider that you have to pay for the cash advance you got. Furthermore, using the cash advance for things other than your business will only make a low credit rating worse.

  • Borrow only the amount that you need.

Look at the different aspects of your business and study how you will improve your business in different aspects. Ask yourself what your business needs. Do you need more workforce? Do you need more equipment? Do you need to expand to a different location? Do you need to reinvent your product?

By doing so, you will have a clear idea of the possible expenses in the future. You don’t have to make a blind estimation of the money that you need to get.

If you know how to prioritize your business expenses, you will surely benefit from a business cash advance. It will help you save or expand your business. If your business has become stable because of the help of the cash advance, your credit rating will start to improve.. AND That is Great for the future of your business.