Horizon Business Funding

20 Reasons Why Your Business Might Consider MCA

November 6, 2020

There are all kinds of reasons that so many small businesses out there need outside cash every now and again. Maybe it’s to get you through a cash flow crunch, or to take advantage of an opportunity like a discount sale on needed equipment or inventory. Luckily for those businesses, there are also all kinds of ways for businesses to get that cash, and quickly.
Of course there are banks, both in person and online. But what if a business owner doesn’t have the time to go through the grueling bank application process, or collateral to offer up in order to obtain the loan? That’s just one time you may consider a merchant cash advance as your solution. A merchant cash advance can be obtained easily, with a fast application and approval process that delivers the cash you need quicker than other funding options.

A Merchant Cash Advance can be used for your business to…

Pay Your Tax Statement

Benjamin Franklin has been attributed in saying: only two things are certain in life, death and taxes. There’s not much you can do about the death factor, but you can counter the tax one. When the IRS says you owe them money and you want to pay it back immediately, a merchant cash advance can be your saving grace. You pay the settlement now, preventing the IRS from tacking on more interest, fees, and penalties.

Cover Slow Receivables

When clients or customers are slow in paying their invoices, you can often find yourself in a crunch for cash flow. Cover that gap with a merchant cash advance! Future revenues are a sure thing, but you need cash in hand to keep the business afloat. Since an MCA provider primarily cares about the strength of your revenue stream — and not your credit score — a merchant cash advance is the perfect ticket for this particular scenario.

Pay Employees at Your Business

Employees should be treated fairly, which means paying them on payday. But when cash flow is tight or customers delay payment, you’ve got to scrounge up the money somewhere. A merchant cash advance can act as that source, providing the necessary funds to pay wages and keep your employees happy and invested in your business success.

Cover Daily Operations

Sometimes, you need some extra cash just to cover daily operations at your business. Payments are coming for those activities, but if you can’t complete them… Well, you can guess what happens next. More operations equal more money, and fewer operations equal less money. A merchant cash advance bridges that gap, keeping you solvent until account receivables come in.

Pay Your Lease

If you operate a brick-and-mortar location, keeping the doors open is a must. It’s obvious to say, but no paying customer will (or can) come into a business with an eviction notice taped to the door. When sales are lukewarm or you need extra money to purchase inventory but the landlord’s demanding the rent check, consider applying for a merchant cash advance.

Pay Vendors

Some vendors will allow you to renegotiate terms when you struggle to make ends meet. Others, perhaps the supplier who provides custom mufflers to your auto shop, will not. With those vendors, use MCA funds. They’ll pay their bills and keep your working relationship strong.

Provides an Alternative to a Business Loan

The struggle to get a traditional business loan is real. The reason could be the timeframe or some other factor, but it occasionally comes down to a bad credit score. If you happen to have a less-than-stellar credit rating, an MCA is worth looking into because MCA providers like Sky Bridge don’t focus all that much about credit. They care about forecasted revenue.

Get Funding Without Collateral

Banks and traditional lending institutions demand collateral. It’s how they prevent people from defaulting on the loan. But what if your business owns little or no assets to offer as collateral? If that’s your situation, a merchant cash advance could come to the rescue. Merchant cash advance providers like Sky Bridge Funding don’t require collateral, only the probability that your revenues will continue.

Get Funding as a Newer Business

Some lenders also employ requirements about your time in business. In most cases, a bank requires at least five years of business history. Merchant cash advance providers usually don’t use the same stipulation, although it varies by the provider in question. At Sky Bridge Funding, we offer MCAs starting at a low, common denominator: businesses that have been open for only six months.

Get Fast Business Cash

When you need fast cash, the bank or a small business grant won’t be of much help. Loans and grants take weeks, if not months, to process. A merchant cash advance, in contrast, takes less than two business days. The cash goes directly to your business bank account, too, so you have fast approval AND fast access to funds.

Receive Multi-Purpose Money

Some loans set stipulations about how the money can be used. Grants also come with some hefty constraints on how you use the funds. And, while credit cards offer no specific use restrictions, some vendors and third-party service providers won’t regard them as an acceptable form of payment. If you want or need flexible money, a merchant cash advance may be your best bet.

Get Cash Even When Your Other Lines of Credit Are Tapped Out

If your credit cards are maxed out and personal lines of credit (i.e., friends and relatives) used up, it could be time to look into an MCA. Again, your chances of getting one depend entirely on future receivables. If those are strong, you should be approved for a merchant cash advance.

Cover Unexpected Situations

Guess what? Your shipping truck overturned an icy road in Iowa, spilling candy all across the road. (This incident actually happened recently, although the intended recipients were dairy cows.) It’s Christmas, which means it’s do or die time. Do, with a merchant cash advance. Use it to get in an emergency shipment of chocolate and reindeer jelly beans.

Buy a Boatload of Inventory

When an inventory opportunity comes along, you want to strike while the iron is hot. If you’re fortunate enough to have cash reserves, you can seize the day. (Carpe diem!) However, if you lack a rainy-day fund, a merchant cash advance may be just what you need. The right-here, right-now money of an MCA lets you purchase the inventory AND turn a tidy profit now.

Meet Service Level Agreements

You make commitments to customers. If you fail to meet them,a they could (and will) complain to the BBB, leave bad reviews, or leave you for a competitor. To keep them happy and your reputation clean, use an MCA. Hiring additional staff to provide contracted services will secure customer loyalty, repeat sales, and referrals.

Get You Through a Natural Disaster

Earthquakes, hurricanes, and tornadoes happen. So does damage from hail and mudslides. You can’t control the weather, but you can manage your response to it. If a natural disaster hits and you need money to tide you over until an insurance payout comes through, you should look into a merchant cash advance.

Prevent Imminent Failure

If the oven implodes or your main service truck falls victim to a tree, you can’t really wait around for the insurance adjuster. You need a working oven or truck, pronto. To get back up and running, use a merchant cash advance. Every minute the oven’s down or the truck sidelined, your business is losing money. The cash from an MCA can help minimize the lost revenue that results from equipment failure.

Pay Temp Workers

When you own a small business, a sick or injured employee can hurt you. You can’t fulfill orders or service agreements. A merchant cash advance provides money that can be used to bring on a temporary employee.

Cover Seasonal Price Increases

You know gasoline prices fluctuate, but it can be a hard item to account for. Will the price jump a penny or ten cents? Ping-pong from week to week? You can cover the higher and oft-changing costs with an MCA. This seasonal price change goes for more than just gas – including lumber, seafood, and fruits and vegetables, just to name a few.

Get Through Seasonal Slumps

The longer you’re in business, the better you can budget for seasonal slumps. They tend to occur like clockwork. The best summer beach hotels, ice cream parlors, ski resorts, and lawn care companies know how to adjust in slow months. But when you’re fairly new to your particular industry, you might not have a clue about seasonal slumps. Survive your first ones with merchant cash advances, then use that seasonal information to guide your business budget.

What do you think? Is an MCA right for you? If so, get started by filling out our application today or call 1-888-573-1151 to speak to a Funding Advisor.