A merchant cash advance is a short-term funding solution for firms that take credit and debit card payments, and is an alternative finance option when traditional business loans aren’t accessible.
With an MCA, a lender provides a business with an upfront sum, which the firm repays through a fixed percentage of its card sales. A flexible fiancé product, MCAs let companies use funds for a wide range of purposes.
Equipment, inventory and stock purchases
Paying for new equipment can be expensive, but MCAs let firms make full upfront payments or initial payments necessary to gain immediate use of machinery or tools that help generate income. MCAs can also be used to purchase inventory without impacting cash flow. As stock is sold, funds received can feed back into the business.
Promoting and enhancing image
Many firms use MCAs to improve their public image and raise their profile. Funds can repair or renovate business premises covering costly work. However, they can also pay for advertising and marketing that brings in more business.
Covering and managing cost
Companies require working capital and effective cash flow management to function properly. MCAs can cover day-to-day costs from paying staff salaries and suppliers, so businesses run smoothly. Advances are especially helpful during quiet seasons, ensuring funds needed are always accessible. Large tax and VAT bills can put a serious strain on firms, but MCAs can also be used to cover payment due to HMRC.
Business expansion
It can be difficult for firms to grow when they only have enough funds to cover their regular running cost. An MCA is a proven solution for enterprises seeking to invest in their future. Through an advance, companies can improve the range of services they provide and expand their offerings. New premises can also be secured and the wages of new staff hired will be paid.
Whether you’re looking for an MCA to manage cashflow or to expand your enterprise, at AJL Finance we can help. To assess the likelihood of your firm obtaining an advance, use our innovative eligibility checker now.
