Business owners, like consumers, can experience ebbs and flows in their income that can affect the financial health and stability of their businesses. In addition, they can also experience unexpected expenses, such as repairs, inventory, or rises in product costs that can negatively impact their ability to keep their operating budget on track. On top of these unexpected expenses, they still need to pay utilities and meet necessary expenditures, such as taxation and payroll for employees. 

During hard financial times, consumers may choose to take out a home equity line of credit on their home or use a credit card to take care of unexpected expenses. But many small business owners, especially those that are relatively new, may lack easy access to reliable credit options. 

If you're dealing with a financial shortfall in your small business, this information on merchant cash advances may help you determine if they are a viable lending option for your needs. 

More accessible than SBA loans 

While the Small Business Administration's loan program for small business owners is a worthwhile program that has helped establish and grow thousands of small businesses during its lifetime, applicants often find it to be complicated and time-consuming to apply. In contrast, a merchant cash advance (MCA) is not a traditional loan. 

Instead, a merchant cash advance is actually an advance on the future credit and debit card sales that your business will process. The amount that a business can qualify to receive is a range based on past daily credit and debit card sales over a specific time frame, with the borrower able to choose the amount they need to borrow within that range. 

Repayment can be easier than a traditional business loan

The repayment method for merchant cash advances may also be structured differently than those of many other types of business loans. Instead of paying a set amount on the same date each month, the payments are typically a percentage of your daily debit and credit sales, with the payment automatically drafting out of your business bank account on a daily, weekly, or monthly basis. 

Simple application process and fast approvals

One of the biggest benefits of merchant cash advances for small business owners is that the application process is simple and fast. Most ask for only basic documentation, such as bank statements, verifiable sales history information, and the financial ability to meet minimum credit and debit card sales amounts. 

To learn more about merchant cash advances and determine whether they are a good credit option for your small business, make an appointment to discuss your situation with a reputable merchant cash advance provider like Federal Direct Funding in your area.