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How Retail Store Funding Can Help Your Business

Running a business can be a very difficult thing to do, especially when you are just starting out. With the economic situation affecting many countries today, many businesses are shutting down or losing a lot of revenue. For the past few years, it has become more and more difficult for businesses to successful run their businesses, owing to financial crunch.

The Growing Problem in Businesses Funding to Maintain Cash Flow

Nowadays, businesses which have large debts from making excessive use of their credit card, find it difficult to cope with the changing financial situation. There are a significant number of businesses, which rely on credit cards, for funding about 25% of their business operations. As credit terms get stricter, this method just becomes less practical and could ultimately lead to the business going bankrupt. Although customer sales may have improved a bit since reaching their lowest levels, it will still take a considerable amount of time before they climb at a significant level, where revenue will surely rise.

All of these facts stated above give importance to merchant cash advances because of its advantages for funding retail stores and other businesses. Companies which offer merchant cash advance can greatly help businesses to run smoothly. These companies are paid back through a business’s credit card sales, on a monthly basis.

Common Problems with Running Retail Stores

One thing about getting a business loan from banks is that it is very difficult to have one approved because of all of the requirements of the banks, in order to process it. When it comes to retail store financing, it can be very difficult to get a business loan approved by the banks. Banks have many strict stipulations when it comes to approving business loans, particularly with unsecured business loans as there is a higher risk involved. They would look at the borrower’s credit score, bank history and many other factors, including the reason for the loan, type of business and other things before they consider approving the loan. Even if you are considered qualified on these criteria, some banks may still deny the business loan, especially when it is for small retail enterprises. When this happens, the cash flow in a retail store can slow down.

Requirements for a Merchant Cash Advance

A merchant cash advance can be applied for, given that the borrower accepts credit card providers such as Visa or Master Card. If you fulfill this requirement, you can easily avail of a merchant cash advance. This gets rid of the hassle of long processing, which is done when applying for a business loan. There are many advantages of a merchant cash advance. Given below are some advantages:

  • Cash is readily available to help bring back a healthy cash flow
  • Capital use is easily and immediately retrievable
  • Easy merchant cash advance can allow for “sticky” situations where stocks are low or there is a lack of funds to pay employees
  • Paying of advance does not interfere too much with sales

 

With the help of merchant cash advances, people would no longer have to worry about the long and strict process that banks require people to undergo, when a business loan is applied for.