Merchant Cash Advance is perfect for businesses that take card payments and have demands on their cashflow. It allows businesses up to 2x their monthly card payment revenue with flexible repayments on a revolving basis. Unlike a loan it has no fixed repayment method and is ideal for businesses in the retail sector. Merchant Cash Advance can be setup very quickly with the initial payment made within hours. At Pinnacle Business Finance we support a lot of businesses in getting more competitive card terminal fees and access to quick cash. This, in turn, saves a business time and money with very little paperwork required.
A typical seasonal business may see as much as 70% of their turnover happen in just 3-4 months of the year. This means they must buy stock in advance of the rush. We recently supported a small retailer who is already looking ahead to Christmas. They need to buy a lot of stock in bulk and although they have a fantastic 50% margin, they are currently in a quiet period. Merchant Cash Advance allowed this business to access 1.5% of last month’s turnover, with the ability to get more funding as the business gets busier. They are now able to buy in the stock they need without the cashflow crisis of not paying suppliers. By buying stock in bulk they have also negotiated a volume discount of 5%, meaning the finance will likely have no cost. Cash is king and having access when you need it is priceless!
Often, we see cases where finance brokers have simply quickly sourced a loan for a business and not understood the cash flow cycle. A business we saw recently works as a mobile bar in the events industry. They are very seasonal with nearly all their turnover exclusively happening in the summer months. The loan they had was rigid, it wasn’t on a revolving basis. With nearly all their turnover taken by card payment, a revolving facility through merchant cash advance was ideal. It now allows the business flexible repayments as a small portion of the money is taken from every card payment. This will mean their cashflow is aided and they shouldn’t be left with any repayments after the busy period.
Not all businesses suit Merchant Cash Advance so you should be clear why you need it. The finance is designed for instant cash when you need it with flexible repayments. If you are using Merchant Cash Advance all year then it will work out very costly. At Pinnacle Business Finance we always take the time to understand the business to ensure you are getting the right product. Think of it as a sports car, it’s fast and exciting but you wouldn’t take one for a substantial drive!
Merchant Cash Advance is great for seasonal businesses, it allows them the cash to borrow money when they need it. The flexible repayment means they are repaying just a small amount of card payments every time. It is very effective when it’s used for those short bursts but can be expensive if it is used all the time.
Pinnacle Business Finance
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