A Merchant Cash Advance (MCA) is an immediate cash advancement which is paid back through your future credit and debit card receivables. An MCA is not a LOAN, but can be a great alternative to a bank loan because it is quickly processed, provides immediate funding, and allows for much needed financial flexibility.
Financial Flexibility for your business is always important, and here are 10 ways you can use a Merchant Cash Advance to improve your business.
Purchase New Equipment
As the old saying goes, “one has to spend money, to make money”, and in today’s world, business owners need to have the best equipment available to stay ahead of its rival competitors.
Using an MCA to provide an immediate equipment upgrade can help keep your business in front of the competition, and increase production.
Ex. A pizza restaurant that does not operate efficiently because of its outdated equipment may use a cash advance to purchase a brand new pizza oven to speed up its production.
Expand Your Inventory
Small business owners often use a Merchant Cash Advance to expand their current inventory, and to bring new products into their business.
Receiving additional business funding can provide you with more flexibility to try new products or increase inventory in your pre-existing products. Expanding your inventory can increase sales, and help exploit what products consumers prefer, while keeping a flexible budget.
Ex. A painting company used a merchant cash advance to expand the amount of color options it was able to provide to accommodate more customers.
Open Another Location
Once business owners have established their business, their next goal is to grow their brand and customer reach by opening more locations.
But many owners do not have enough capital to expand their business on their own, and would have to take on angel investors to expand.
Instead of taking on unwanted investors, you can use an MCA to open a new location and expand your business’s customer reach. This could include a successful gym that may want to expand their customer base by opening a second location on the opposite side of town.
Hire New Employees
If your business is experiencing rapid growth, or just needs more man power to run efficiently, an MCA is a very effective solution to help hire new employees.
Having the capital to hire new employees can improve the efficiency at which your business operates, and will improve the process. Having more hands on deck can help diversify the work load of each employee allowing the company to operate more efficiently.
Ex. A bar who struggles to get drinks to its customers in an efficient amount of time can use additional business funding to hire more bartenders for their staff to improve their drink production.
New Marketing Strategies
Many small businesses need and want a new marketing strategy to expand their brand awareness, but do not have enough excess capital in their budget to do so.
Receiving an MCA can provide more business funding for your company’s budget, and allow you to implement more advertising strategies such as internet postings, newspaper advertisements, or vehicle wraps for your business.
New marketing techniques can help increase revenue for your business by bringing in new customers, and reminding old customers about your products and services.
Ex. A candy company can use an MCA to increase their marketing and advertising during the month of October in preparation for Halloween.
Even if you have properly planned ahead for your business, unexpected costs can always occur and can reduce your cash flow.
This reduction of cash flow can make it extremely difficult to pay your employees, buy new supplies, and pay your utilities.
An MCA can give your business financial flexibility by providing more working capital to cover your current operating expenses.
Ex. A coffee shop that is having trouble keeping up on their utility bills can use additional business funding to pay their utility bills, and have some extra cash to provide more flexible working capital.
New Product Development
The future of any business is determined by their ability to develop and improve new products and services.
But businesses can find it extremely challenging to find flexibility in their budget to test these much needed new products.
An MCA can provide the business funding your company needs to research and development new products for your business.
Ex. A technology company can use a merchant cash advancement to try and exploit a new type of music player or tablet.
Pay Off Existing Debt
For some business owners, paying off existing debt while operating a business can be extremely difficult.
Debt can arise from pre-existing loans, taxes, or vendors, and can put unnecessary pressure on a business owner to make these payments. If these payments are not made in time, expenses will only increase due to late fees, and if are never made can cause foreclosure of your business.
An MCA can be a great business funding alternative and help relieve the pressure of these existing debts by giving you immediate cash to pay these expenses, provide you more time to increase sales, or allow more time for your receivables to come through.
Ex. A business owner who is behind on their taxes can use a merchant cash advance to pay off their existing tax debt to avoid late fees.
Prepare for Busy Season
For many businesses, there is a busy season and a down season.
It can be extremely difficult to find enough capital for these businesses to prepare for busy season when coming out of their down season. These busy seasons are the most important time of the year for businesses, and they cannot afford to miss out on profit maximizing opportunities.
If your company does not properly prepare for busy season, it may end up not having enough supplies to meet the current demand of your customers. If you do not meet your demand for busy season, your company may be left in the negatives for the year and could eventually have an ongoing effect.
Receiving a merchant cash advance can provide the funding you need to prepare your business for its busy season, and maximize your profits to prepare for the following year.
Ex. A landscaping company can use a merchant cash advance to purchase new equipment such as lawnmowers in preparation for the summer season.
Redesign Your Store and Display
The design and display of businesses are constantly changing with the current times of today’s world, and can leave your store’s design outdated if you are not constantly changing.
Your business’s décor, theme, and street appeal are the first impressions your business makes on a customer, and you want it to be appealing. Many owner’s want to keep up with the current trends, but cannot provide the capital needed to redesign their image.
A merchant cash advance can provide the much needed business funding to redesign your store and improve your display to help better appeal to customers.
Ex. An outdated 70’s bar can use a merchant cash advance to redesign their bar into a modern night club.