Getting financing for your organization is sometimes necessary to keep making progress toward your organizational goals. There are lots of financing options, so it is important to find the one that best meets your company’s needs and can keep your finances from being too far in debt. Many organizations opt for a merchant cash advance to get funding fast.

What Is a Merchant Cash Advance?

A merchant cash advance is a type of financing that can be used by a business with little (or no) collateral or an inadequate credit rating. The lender provides the agreed-upon amount to the business and, in exchange, takes a portion of sales from the organization until the contract terms are fulfilled. This gives an organization cash flow to make purchases or progress toward organizational goals without the drawbacks of a traditional loan, which can be difficult to get and can limit how the funding is used.

Benefits of a Merchant Cash Advance

As with any type of financing, there are benefits to getting a merchant cash advance. Comparing these benefits with those of other types of financing can help you decide if this is the best option for your business. Benefits include:

  • Merchant cash advance is dependent on future sales rather than collateral or credit rating. 
  • The process is fast, so you will have access to your financing sooner than other financing options. 
  • The approval rating for applications is high compared to commercial bank loans. 
  • The collection is based on revenue, so your organization will not struggle to make payments if sales are down one month.  

A merchant cash advance can be a good way to get financing for your organization and keep moving toward your goals. By weighing the benefits with your needs, you can decide if it is the best option for your company.