Merchant Cash Advances Can Help Small Business Get Funds

By |2017-09-14T11:21:22-07:00May 16th, 2013|

It is often reported that small business is the engine that drives our economy. If that’s the case, the economy is clearly not firing on all cylinders. Small business growth, creation and ownership have been a part of the American Dream since our nation’s founding, but unfortunately the health of small businesses have not kept pace with bell-weathers, such as the burgeoning stock market. Further, credit remains tight for too many who, sometimes through no fault of their own, either cannot survive the timeframes in which traditional lenders can make funds available or simply cannot meet the stringent guidelines and credit requirements of a standard business loan.

MoneyBut there is another way!

Merchant Cash Advance has exploded as a viable option for many small businesses. They offer options suitable to the present fix of many merchants in today’s economy.  MCA’s offer faster funding, less documentation needs on the part of funders and no collateral requirements. MCAs cost more, but they also offer flexibility, timeliness and innovations that traditional banks and their loans cannot match.

Another distinct advantage of an MCA is that the money can be used in any way the small business merchant deems necessary. Just as important, there are few limitations on the types of businesses and industries that can take advantage of an MCA. From medical practices to restaurants, automotive parts suppliers and equipment leasing firms to general retail; if you can think of an industry, it’s likely that there’s a small business merchant who has used and benefited from an MCA. And one final mention, if a small business has been hit by a natural disaster, like Hurricane Sandy for example, it’s more likely to gain funding from an MCA than a bank.

Currently, the MCA industry services hundreds of thousands of small business merchants with cash advances for growth and daily business needs through a variety of different mechanisms. Some repayment cases are based upon credit card receipts while others are based on gross revenues. Other options exist as well. The point is that MCA’s provide access to funds, making tens of thousands of businesses eligible for capital infusions with fewer requirements than banks. That’s good for the economy and good for Main Street.

The MCA industry has been and must remain enormously progressive in terms of the products it offers and the way it markets itself.  It is hard to say what the new norm will be for small business financing moving forward but one thing is for sure, traditional lenders will likely safeguard their lending more so than at any point in history, at least for the near future and more and more small businesses will be searching for necessary capital. MCA’s are likely to be a viable alternative for many merchants moving forward and their growing impact on helping the economy’s engine hum on all cylinders cannot be denied.

Stephen Sheinbaum is CEO of Merchant Cash & Capital and a panelist at the upcoming Access to Capital: Money to Mainstreet event in Chicago.


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