More on MCAs
The Rising Interest in Merchant Cash Advances
Immediately after we published a blog post at AVPS about leveraging Merchant Cash Advances to boost your business’s cash flow during tough times, the topic began making headlines in financial news. Business News Daily featured an article on the same issue, highlighting that, in today’s era of financial constraints, many small businesses feel abandoned by traditional lenders, as revealed by a recent survey. Consequently, an increasing number of businesses are exploring alternative funding sources, like merchant cash advances (MCA), to navigate their financial challenges.
Survey Insights on Merchant Cash Advances Usage
The survey was conducted by Merchant Cash and Capital (MCC), themselves providers of MCA’s, and found, among other things that 42 percent of small businesses using MCA’s didn’t think they’d qualify for more “regular” loans from financial institutions, though an even larger number — 57 percent — had already been declined or withdrawn their applications!
How Businesses Utilize MCA Funds
The article reveals that businesses utilized MCA funds primarily for expansion and growth (32 percent), followed by inventory purchases (15 percent), and then covering payroll, taxes/bills, and marketing efforts, according to the survey findings.
The Appeal of MCAs Despite High Costs
Although often thought of as “expensive money,” AVP Solutions’ cash advance partner promises “rock bottom” rates, along with advances of up to 125% of monthly credit card sales, with 6-10 month terms, for businesses processing over $4,000 worth of credit sales a month (for the standard program; there are variants –inquire within!)
A Broad Range of Eligible Industries
Specialty retailers, pet grooming outlets, and tattoo parlors, as well as the more traditional “main street” businesses such as consumer electronic stores, restaurants, hotels/motels, and car dealerships, may find it surprising to discover their eligibility for these programs.
Extensive Qualification Criteria and Uses
The list of who might qualify is extensive, as are the facets of what’s available. Quoting an MCC spokesman, the Business News Daily article notes that “a lot of businesses use (these cash advances) as bridge or gap financing.” Further, the spokesman pointed “out that many businesses taking advantage of MCAs need funds quickly.”
Conclusion: MCAs in Today’s Economy
And in a challenging economy like this, providing funds at all — let alone quickly, and in sufficient amounts — is always welcome for the business of doing business.
