Unlike many other forms of finance whereby you pay back a set amount each month on a loan repayment schedule the merchant cash advances can help seasonal business by enabling them to pay back in line with their sales.
This is so much the case with seasonal business. Take for example only recently we helped a fishing tackle shop find the finance to replenish stock and expand the floor space by extending the store into an adjoining premises.
The very nature of this business meant that they take high sales in the spring and summer and then dropping into autumn and of course winter. Although the business did have a line of customers who brave winter conditions and buy throughout the year the balance sheet reflects the seasonal change.
With a traditional bank loan the business would be paying back a set amount each month regardless of sales. This can put a small business under strain and it’s not in anybody’s interest to do so especially for the business owner.
How merchant cash advances can help seasonal business
The merchant cash advance product works by collecting repayments when the business makes a sale through their credit / debit card transactions thus enabling them to pay back in line with their current cashflow. This keeps the pressure off the business to repay a sum when the business cannot afford to do so.
Cash sales are not brought in as a factor in placing the loan it is purely decisioned against the business PDQ credit and debit sales.
Our fishing tackle shop has had the funding quickly without any fuss – in fact they were funded in 2 days. The application is very simple and takes away the stress involved with a lengthy financial review. The cash advance is also unsecured which means you don’t have to put an asset such as a property or other asset against the deal. It’s the perfect unsecured flexible business loan.