Although there are many good ways to spend merchant cash advances, there are also ways you should not spend them, if you want your business to thrive. Cash advance providers want the best for the businesses they work with, while trusting owners to make good decisions about how to distribute funds. Here are some ways we at Quikstone Capital Solutions would advise businesses not to spend merchant cash advances.

1. To make yourself feel better

Having extra cash can relieve the stress that can keep you up at night, worrying about what could go wrong next. Getting a merchant cash advance even when you have enough cash, however, might be a costly move that actually hurts your business. Advances are easy to apply for and get when you need them; there's no need to do so when your business has what it needs to run.

2. On anything that doesn't make the business grow

Because you pay a fee to get a cash advance, spending it to maintain the status quo of the business will end up putting you more behind than before, once it is repaid. If you're just hanging on and need the cash advance to pay regular monthly expenses, it's time to re-evaluate your business plan to see how you can start to grow.

3. On luxury items or consumables

A business owner may want to have all the trappings of being an entrepreneur, such as a luxury car, fancy meals out, and designer clothes. If your business is making a profit that allows you to buy these items, go right ahead. But if you need to use a cash advance to get them, the cost is probably a little too high for your current budget.

4. On personal items

Business owners often sacrifice while building their businesses, reinvesting many of the profits back into the operation and living on less until the business can sustain itself. Needing to use merchant cash advances to buy groceries or other personal items is a red flag that changes should be made to get on a more profitable trajectory.

 5. To make the business "look" better

To some extent, upkeep and remodeling can make a business more attractive and help bring in new customers. Spending cash advance money on improving the business with an eye to growth is not a bad idea at times, but spending just for appearances' sake or for status is not a good use of funds that need to be paid back quickly.

 6. To pay off another loan or advance

One big red flag for a business is when it repeatedly takes cash advances to pay off existing advances or other debt. This kind of revolving door is usually a spiral downward and can threaten the viability of the business.

Quikstone Capital Solutions seeks to help businesses by making merchant cash advances available for the purposes of improving that business. Although there are no restrictions on how you can spend them, using wisdom and prudence is best for the continued success of your business.