Tips for Merchant Cash Advance Success

Business cash advance has the potential to help your business manage its finances if done correctly and for the right reasons.  When deciding whether to seek an advance, consider the following:

  • Evaluate feasibility of repayment terms in the context of your business.  How will the repayment affect planned business strategies in the long term?
  • If you obtain a merchant cash advance from a company that requires you to switch to a different credit card transaction provider, is there a cost associated with breaking the agreement with your existing provider?  Factor this into the total cost of the advance.
  • Can the amount of cash you need be reduced or obtained from other, less expensive sources?  Cash advances and factoring are a valuable tool for those in need, but should be generally used only after other financing sources have been exhausted.
  • If factoring, will your customers be comfortable dealing with a third party in making payments? 

Any business that needs a cash payment should be aware that traditional bank loan and lines of credit are not the only options.  Both a cash advance and factoring company will allow a business to get the cash it needs quickly, without the risk of taking on an additional credit obligation.  If you choose to seek out one of these options, examine the benefits to your business and consider the costs.  By making an informed decision, you should be able to make the most of whichever financing option you choose. 

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