Using a Merchant Cash Advance to Get Back on Your Feet: Some Guidelines

Posted by Karen Erdelac on Jun 20, 2017

Using a Merchant Cash Advance to Get Back on Your Feet: Some GuidelinesIn the life of almost every business, ups and downs come along, including some major disruptions like natural disasters, data loss, or bankruptcy. Despite the devastating nature of these events, they don't have to mean the end of your business. Even bankruptcy can sometimes just mean restructuring so that more money is available to run the business rather than carry debt.

A merchant cash advance can be a tool to help business owners get back on their feet after a major disruption, but it must be used carefully in order to best help a company. The following guidelines can help business owners use a merchant cash advance to recover from a major disruption.

Take Stock of Your Business

Some business disruptions are extremely difficult to recover from. It's important to figure out where the business stands and determine whether it has a viable future. How much of the customer base remains intact, whether you still have sources of affordable inventory, and what it will cost to get back on your feet are all factors that could determine if your business can reasonably survive.

You don't want to throw good money after bad, but it is often possible to rebuild after disaster and start once again on the road to profitability. If your vision for the company is still intact and you have a solid business plan going forward, it's more than possible to continue on after a major disruption -- if you have the cash flow to do so.

Establish a Pattern of Growth

Using a Merchant Cash Advance to Get Back on Your Feet: Some GuidelinesMerchant cash advances work best when businesses are growing. Sure, having cash to keep operating may be necessary, but unless you can operate while repaying the advance, you will just get deeper in the hole with every passing day. The good news for businesses facing huge problems, though, is that once you hit bottom, there's nowhere to go but up.

Merchant cash advances can give you the cash you need to start growing again, if you plan carefully and use them well. Some good growth techniques include a multifaceted marketing plan, partnership with a complementary business that can send new customers your way, and finding the best possible inventory channels (lowest price, highest quality) to maximize profit margins.

Using Your History to Leverage Your Future

Your business may seem like it's in shambles, but merchant cash providers will often see a solid track record as proof that you can make it work again. Instead of looking only at your credit score or your recent misfortune, providers see that you've been successful in the past and want to partner with you to be successful going forward as well.

History is filled with stories about businesses that failed or nearly failed, then rose from the ashes into great success. Dyson founder, James Dyson, had over five thousand failed prototypes and was flat broke when he invented the Dual Cyclone vacuum that put his company on a path to success. Dyson is currently worth $4.5 billion.

"Colonel" Sanders' roadside fried chicken stand was put out of business by construction of a new highway before he started Kentucky Fried Chicken with an investor at age 68. Franchising soon followed and the company now has $16 billion in annual sales.

Business failure or disruption doesn't need to be the end. A merchant cash advance can give you the capital you need to turn failure into success. While a bank loan may be almost impossible to get without assets you no longer have, a merchant cash advance is not a loan. Instead, the provider purchases some of your future sales, then takes a set percentage each day until the advance is repaid.

In many cases small business owners lack the credit or collateral to access the money needed to remain flexible.  Quikstone Capital Solutions provides fast cash for businesses.  A merchant cash advance from Quikstone Capital Solutions is a business loan alternative that can help your business thrive and prosper, whether you need cash to buy equipment, cash to renovate or expand, cash to purchase inventory, cash to advertise or cash for emergencies. Quikstone Capital Solutions can help provide you with the business capital you need.Apply Now

Topics: Merchant Cash Advance