Merchant Cash Advance- The New Age Financial Scheme for Small Businesses

Summary: Many a time, businesses need immediate funding without possessing a great credit score or collateral. With a merchant cash advance, there is hope for small businesses and startups.

Suitable for a wide range of businesses, merchant cash advance financing is a flexible funding option designed to ensure that merchants get the cash they need. This concept is fairly new but has already become quite popular in the business sector. Read on to find out why.

Features of a Merchant Cash Advance

Unlike traditional financial institutions, a merchant cash advance provides funds for businesses that have temporary credit needs. Based on the Point of Sale receipts, an entrepreneur will be able to receive a certain amount of cash. The entire process is simple, uncomplicated, and completed very quickly. Approval may be gained anywhere from 3 –7 days. Both the lender and the merchant will come to an agreement as to the repayment terms and tenure. Flexible and stress-free, the amount to be paid back will depend on how the business is doing. The entire advance amount needs to be paid in full within this time period. For every business owner, time is critical during a financial crunch or need. With a cash advance, you will receive the cash immediately without losing out on too much time. As an added bonus, one can avail of an advance without collateral as well as choose to avail of financial help from other lenders simultaneously.

Points to Remember Before You Invest

Before you do decide to choose cash advance funding, there are certain points to keep in mind. Although your credit score is not a criterion, the lender may have to investigate your credit history to understand your repayment habits. A hard credit check can negatively affect your business’s future credit score. Since this type of ending does not have a fixed structure, it is regulated by a Uniform Commercial code that differs in each state. Daily repayment can affect the cash flow of your business, and if you ever do make the full repayment before the decided tenure, don’t expect savings on your interest. While you do get immediate funding, remember that the merchant cash advance business may charge a high percentage rate, but its advantages offset the cost in the long run.

Applying for Merchant Cash Advance

Therefore, to begin the process, you need to fill out an application form and provide certain necessary documents. Next, the merchant will have to submit proof of citizenship, a copy of the lease, and bank statements. Finally, sit tight and wait for the approval that could come in less than 24 hours. Sometimes switching the credit card processor will be necessary to avail funding. Once the amount is decided, both the lender and the merchant will have to decide on details such as payback amount, holdback percentage, advance amount, and terms of the advance. After the disbursal of funds, the entire process of repayment automatically begins through the merchant’s account.

Merchant cash advance lenders look for applicants that have a stable business, a minimum annual turnover, and one that has been using credit cards for a while.

Managing Supply Chain Disruptions With Merchant Cash Advances

When they work, supply chains are like magic. The organization works like clockwork, things get done well and on time, and most importantly, customers are happy! But when supply chains falter, a business can quickly descend into chaos and running it can turn into a nightmare. We saw an extreme version of this in the first half of 2020 and learnings from this period should inform how we build our businesses back strong in the future.


So, what should (or can) a small business owner do to avoid the fall out of supply chain disruptions? Here are some well-tested steps recommended by the experts –

  • Create an emergency supply chain plan
  • Stock up a massive bulk of inventory
  • Identify back up suppliers and diversify your supply base
  • Go local, if possible
  • Put in robust supply chain and overall security measures
  • Build partnerships with reputed logistics partners

Putting in place all these processes and planning for eventualities,of course,comes with an attached invoice. You might not need to spend too much to conduct an audit, identify gaps, and build a back-up plan, but the rest of it will require upfront cash to put into action.

This is where most small businesses drop the ball! And it hurts them twice as much as larger concerns! They are the ones least likely to have the cash reserves to weather disruptions, as well as being the ones with minimal protection and contingency plans.

Easy cash advances by alternative lenders can help in both scenarios –

To be better prepared

SME owners don’t have to put off strengthening supply chains due to lack of liquidity. With easily repaid cash advances, they can invest at their own pace to bring in the various measures mentioned above.

merchant cash advance

They can test and replace vendors, diversify to reduce risk and dependencies and work with good logistics partners who can help them in the long run.

Reduce impact in case of disruption

Cash advances can also come in very handy if things get rocky. Supply chain disruptions can have a serious impact on the cash flow and using alternative financing can help companies pivot quickly to newer business models, stockpile unsold inventory or plug the gap in cash-to-cash conversion cycles.

Access to money will keep SMEs afloat through the worse of it and help them restart when the situation improves.

If you have suffered supply chain disruptions in the past, then you know how harmful they can be. With some judicious planning, you will be able to avoid experiencing them again. So, if you have a plan to bolster your existing operations sitting on the back burner, now is the time to put it into action. Get in touch with our team to unlock the funds to invest in keeping your business safe and growing.

No Business Is Small Enough To Escape Cybercrime. Find Out What You Need To Do To Safeguard your Business.

If you thought your business is too small to attract cybercriminals, you couldn’t be more wrong.  The news reports might have given the impression that only global and national giants fall prey to cyberattacks, but the reality is that 28% of the security breaches in 2019 involved small business victims (according to Verizon’s 2020 Data Breach Investigations Report (DBIR)). 

Getting hit by a cybercriminal can leave a serious dent in your revenue, expose your customers to harm, damage your reputation and, in an extreme case, even lead to your business shutting down. We know that with so much work to juggle and so many competing drains on your capital, it is sometimes easier to look the other way and hope you stay under the radar of cybercriminals. But this head-in-the-sand approach will not solve the problem; you need to invest time and money into securing your business on all fronts.

Here is how you can strengthen your online business security:

  • Train your employees to stay safe online

Bring in professionals to make sure ALL your employees are well versed with best practices of managing online assets safely, especially being aware of phishing scams or malware in emails.

This is doubly important due to the ongoing remote work scenario that opens up access to company infrastructure to multiple, unprotected devices and networks.

  • Bring in strict policies backed by the right tools

You should also establish and enforce robust password/access management rules across the company. Employees must be encouraged to use complex passwords, keep business and private matters separate, and practice all cyber safety protocols. Investing in professional tools for password management, email encryption, or two-factor authentication is an excellent way to enforce a streamlined security system.

  • Invest in the best security software

There are several excellent corporate security software products available on the Internet. Most of these have a complete stack of firewalls, spyware and malware detection tools; however, we recommend you go a step further and work with an IT service provider to bring in more effective measures. Many software companies offer proprietary AI-based tools that provide real-time threat detection and prevention. While a retail store might not require such industry-grade security, small businesses that deal with sensitive information such as freelance accounting or financial management companies should consider taking on this investment.

  • Outsource your cybersecurity

Verizon’s 2020 Data Breach Investigations Report (DBIR)

Instead of trying to make sense of the cybersecurity world, you could hand over your security to a reputable managed service provider. Several IT companies offer Cybersecurity-as-a-service as well, and these could cap your costs while ensuring you get serviced by experts.

Implementing better security features will naturally cost you money, but this is an expense as necessary as your marketing or manufacturing outlays. After all, you wouldn’t leave your storefront unlocked at night, would you? So why leave your digital doors open?

Don’t compromise on your business’ safety; get in touch with an expert today to safeguard your business. If money is tight, then do get in touch with our team at Crest Hill Capital. A cash advance might be just the solution you are looking for.