Small or medium-size businesses getting funding approval within 24 hours is not an uncommon phenomenon nowadays. The odds are if you run a startup or small enterprise and have a seamless internet connection, getting a funding up to thousands of dollars is not a big deal. This is because of the merchant cash advance industry that has become popular among businesses and startups over the last few decades.
That means if you own a small business that often needs a quick infusion of working capital, merchant cash advance can be one of your options to get funds to keep cash flow running. But while choosing any funding option, it is important to do research to make it the right choice and decision for the business.
If you are considering merchant cash advance as a funding option, it is vital to find out its do’s and don’ts to make the most of it.
Merchant Cash Advance
ü Understand Your Agreement
This is, without a doubt one of the essential dos when opting for merchant cash advance. It is vital that you know the correct percentage of daily, weekly, and monthly credit card sale when make partnership with a Broker Company. Understanding the terms and conditions of your agreement will save you from the unexpected surprises in the future.
ü Track Expenses
Tracking expenses of your business is important to determine its standing and the financial decisions you need to take to support it.
ü Use the Funding Option to Access Operating Capital
If you own a seasonal business, know that merchant cash advance is an easy finance option to get you through off -season times; especially when profits are inconsistent. Do use this option to access operating capital to pay debts, make purchase and repairs during low, off-season.
· Use Merchant Cash Advance for Personal Expenses
Once you choose merchant cash advance instead of a business loan, you cannot use it for covering the personal expenses or expenditures that are not related or linked to the business. Know that It is one of the stipulations in the MCA‘s agreement.
· Hide the Percentage of Your Business Ownership
This might seem a trivial advice but hiding the percentage of your business ownership when applying for merchant cash advance may have the following results:
- Misrepresentation can get your application declined if broker discovers the truth
- Misrepresentation may constitute a fraud case on you
· Alter any Documents
Altering lease date, changing/tempering with expiration date, editing out the bank statements or any other blatant alteration may result in application rejection.
Know that merchant cash advance brokers like Alternative Funding are pro in detecting misinterpretations and alterations. Any such attempt is a fraud and crime and may have legal repercussions no matter how small your alteration is.
Overall, merchant cash advance is a relatively quick, easy, and straightforward option to obtain operating capital for the small business. However, before committing to any form of financing, it is imperative to consult reputable broker such as Alternative Funding to avoid early repayments and additional charges.