It is well known that two of the most challenging industries are the retail and hospitality sectors. Rarely do you find that one month is the same as the next and the fluctuation of earnt revenue can vary dramatically. For some, this could be seasonal where the festive and holiday periods bring the best earning potentials whereas for others it can be impossible to predict when the highs and lows will happen making it important to capitalise on the good times and stand firm during the quieter ones.
For businesses in these sectors cashflow is vitally important and keeping this healthy is a must for each company. Something that is often underutilised, but which can yield great benefits to the business, is a merchant cash advance. A merchant cash advance is a form of business finance designed for companies who predominantly generate all income via debit and credit card transactions using a PDQ machine or via online shopping platforms.
A merchant cash advance is arranged by a lender after a review of the businesses cashflow history. It will be set-up to give the business an immediate cashflow boost which is then repaid over a period of time as a result of the card payment transactions received. A specific percentage for the debit and credit card sales will be deducted on a daily or weekly basis until the agreed loan amount has been repaid. Once completed a second merchant cash advance can be agreed and the process can begin again.
The major benefit of a merchant cash advance is you get an immediate boost in cashflow and repayment is directly as a result of future sales. There are many uses for this type of funding which include:
- Boosting cash
- Improving working capital
- Purchasing equipment or machinery
- Undertake property refurbishments or repairs
- General business needs (marketing, training, sales, etc)
- Meeting supplier payments
As a business, the more sales put through a card machine the more suitable you will be for a merchant cash advance. You can secure a high level of funding and repayments are made much faster thanks to the high level of card payments daily.
Finally, this type of funding can also be utilised by online businesses. As a typical example our team have recently helped to secure £50,000 of funding thanks to online payments received through Shopify and Amazon.
If you would like to know more about merchant cash advance, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.
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