Merchant Cash Advances can jumpstart businesses, or make a good business more successful. If your business is struggling now, and better cash flow could solve the problem for now and in future, than a Merchant Cash Advance (MCA) could be the answer for you.
Borrowing money for business does not just answer a need, but can be an astute financial choice. Here are four reasons for borrowing money for your business:
1. Business startup costs need to be paid.
Before the doors open and a single sale is made, there must be something to sell. Every business needs investment before it can open for trade, even if it is just to cover computer, phone and internet connection. You may be able to borrow from friends, family or from yourself, but you need funds to begin.
2. You need working capital to keep cash flowing.
Once open, you will need to replace the supplies used or sold. Suppliers want payment before customer settle their debts, which constantly undermines your cash flow. To keep the cycle moving, you need working capital.
As the business succeeds, this working capital can come out of the profits, but to get to that stage, you need funds to generate enough of those profits to cover more than the cost of borrowing.
3. The investment can make much more than the costs of borrowing.
Even profitable firms borrow money so they can generate more profits than the cost of borrowing and more than they would have had without borrowing.
4. Borrowing money reduces your personal risk and skin in the game.
It may seem wrong to borrow money when you’ve got personal savings, but if that money was saved for your kid’s college education or for your retirement, then using it for the business can prevent you from using it in the intended purpose. Responsibly taking out a merchant cash advance for your business can offer not just immediate benefits, but a better chance of success in your venture.