Business owners should plan ahead and anticipate periods of future financial crunch. There are instances cash flows are tight not because the business is not doing well. Tight cash flows usually happen when the schedule of receivables does not come on time to meet urgent expenses or investment opportunities.
Merchants or business operators are tasked to bridge these gaps to ensure there are no business disruptions. A retailer, for example, needs to stock up on inventories during seasonal changes. Waiting for cash to be available might mean passing up on business opportunities. That’s not good business sense.
Solving a cash flow problem without borrowing
Cash flow hitches are present in most businesses. Whether a business is in the food service sector, a manufacturing concern, or engaged in trading and others, the need for funding support is ever present.
No enterprise is exempted particularly small businesses. However, a bank loan is no longer the only option. Many business owners are discovering a way to skip dealing with the banks. A facility that’s not considered a loan but a solution to bridge cash flow gaps is becoming popular in the world of small businesses.
- Merchant Cash Advance
Cash flow hitches are present in most businesses. Whether a business is in the food service sector, a manufacturing concern, or engaged in trading and others, the need for funding support is ever present.
The merchant cash advance is a facility that’s custom-made for small businesses. There’s no need to fuss over obtaining funds to bridge finance cash requirements.
The structure of the merchant cash advance facility is not complicated. Payment schemes are flexible and supportive of business cycles. That is where this facility is differentiated from other types of funding such as business loans and the like.
- Why the merchant cash advance is good for business
1. Simple Mechanics
It should be emphasized that a merchant cash advance is far from a loan. When a business owner uses a cash advance, he agrees to sell , which are basically discounted.
The business owner may then pay back the amount advanced by the funding company based on the agreed percentage or factor rate. On a daily basis, the percentage of sales, cash or credit card transactions, are held back and earmarked to repay the cash advance until the total amount is fully liquidated.
2. Flexible payment scheme
The most outstanding feature of the merchant cash advance is the flexible payment scheme. Given the simple mechanics, there is no pre-determined installment amount.
Effectively, the amount of payment follows the level of sales which works in favor of the business. Payment adjusts during peaks and valleys. Thus, it becomes a helpful tool to the business owner in terms of managing cash flows and the business as a whole.
3. Quick Access to Cash
If time is of the essence, the will greatly benefit from the expeditious and timely release of the much-needed cash. Unlike traditional loans, waiting time will not take an eternity.
However, the turnaround time when applying for the facility would depend on the completeness of the documentation requirements submitted. In normal cases, processing is a breeze. The approval could take a few days or less.
Once the application is approved, the funds are deposited to the business owner’s account and repayment through the merchant account commence immediately thereafter.
Make a Wise Financial Decision
If you’re a business owner who needs funds to support your operations and straighten cash flows, PDM Capital is a true and tested partner. Many merchants have fruitfully turned their businesses around using the firm’s merchant cash advance facility. Visit http://www.pdmcapital.com/merchants to know the finer details and how it can help a business owner take control and manage finances.