We discussed merchant cash advance and all you need to know before asking for it in a recent article. But after establishing the avenues to get it and the pros and cons of the funding, the need to learn how to use the budget to push sales for your business correctly becomes quite essential.
This piece will take a step-by-step approach and methods to efficiently manage the funding obtained to invest in and boost small business growth. Although Camino Financial only gives small business loans and doesn’t offer cash advances, you will be guided through how it works and how you can mainly get it from other Fintech companies.
What is it?
This is a type of funding that provides your business an alternative to benefit from, which is different from conventional loans from small-scale firms. However, the providers of this service maintain that their financing products cannot be technically described as a loan. But they give an upfront sum of cash to exchange with your sales in the future.
When does a business need this type of funding?
Every business needs funding to either commence operation or to maintain recurrent expenditures. So, a company needs a funding type that needs cash urgently to finance any aspect of its establishment and can take advantage of the short-term opportunity that cash advance brings. However, lenders would have to understand and meet the criteria required to access the funds.
Benefits of getting this type of funding
It has been established that small businesses require finance to survive. And even if they possess a lot of financing options to seek after, yet the available ones may be difficult to access as not everyone is eligible. However, the case with this kind of funding is a tad different. Listed below are a few benefits that accompany it:
● Quick payment
Anytime you apply for a cash advance, you would not have to wait for too long—not more than a week—before you get paid. You will receive it in the account you dropped while filling the form.
● No fixed monthly installments:
For once, you need to understand that a cash advance is not a loan. You do not have to repay on fixed installments. This is because you agree to give in return a piece of your future profits.
● No collaterals:
When you obtain a cash advance, you do not need to worry about collateral. This is contrary to the properties or equipment that contemporary banks and traditional loan companies demand to access the funding.
● No accruing interest:
One fantastic benefit of a cash advance is that you would not be required to pay any interest whatsoever. You are only paying a particular portion of your future profits as you make them. This is different from what we have in banks.
How to properly use a merchant cash advance
As soon as you have access to cash funding, the next big thing to ring in your mind has to be ways and manners by which you can adequately put the funding to good use. Although the finance you get in cash advance isn’t a loan, the one you get allows you to invest in your business efficiently.
Since your repayment will naturally be based on your company’s future credit card sales, you have all the freedom to invest in many aspects and make reasonable profits. To do this, we have gathered few tips on how you can adequately use the funding you get:
- Purchase inventory before the busy season
- Pay employees on your payroll
- Upgrade your equipment
- Start a renovation project
To be put simply, this type of financial option is an essential option for your small business. It’s easy to get and does not require any collateral to set up. Repayment is only based on a certain percentage of your business’s future sales. Hence, you can always seek to get a cash advance to take your business to the next level. And if spent judiciously as advised, you will reap the benefits in the nearest business future.