Merchant Cash Advance Blog

Some critics have been very hard on merchant cash advances. Compared to other types of financing including traditional bank loans, however, there are some definite advantages to this type of funding. Merchant cash advances are not loans in the traditional sense. Instead, the provider is purchasing a portion of the business's future sales. The fee, which is usually about 20-25 percent of the amount, seems high. But consider a loan from a traditional bank, which is usually paid back over a period of 5 to 10 years or more, with interest compounded every year. At 8 percent interest per year, that money costs the business owner 30 to 60 percent of the amount they borrowed.

At one time, business cash advances were considered a last resort for business financing, but in recent years, the advantages to this type of funding have increasingly come to light.

Running your small business can occasionally make you feel like you're all alone in the world. There are so many tasks and challenges involved and help is sometimes hard to find. You may have needs that you don't know how to meet, and it's extremely difficult to figure out how to meet them when you haven't been through the situation before.

Small business owners looking for funding are starting to realize the advantages that a merchant cash advance has over traditional bank loans. Some of these include a streamlined application process, faster access to your funds and a payback system based on a percentage of daily credit card sales. With their rising popularity, more lenders have started to appear on the market. There are many things to consider when deciding whom to choose as your funding partner. 

Although there are many good ways to spend business 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 a business owner against using their merchant cash advance for.