I’ve been a small business owner for nearly a decade. Since my mid-20s, I have worked to start business after business in retail owning specialty shops that would become a success just to sell them off and start anew. I’ve found it to be an honest passion of mine. The challenge of starting a business successfully and maintaining growth over a period of time is something I truly enjoy.
During my time I have spoken with many similar small business owners who have lamented certain problems that eventually lead to the closing of a shop. The problem is always a financial one. There’s a certain level of truth to the rumor that nine in ten new shops that open up end up closing within the first two years.
When it comes to retail there is a little known tool at the deposal of many businesses. Merchant cash advance loans are a great opportunity for businesses to receive a boost in finances around their busiest time in the year, providing them with the opportunity to increase their inventory or acquire certain types of products that would cell particularly well during that given time in the year. Many retail businesses generally have a busy part of the year which falls around the holiday season for most general retailers. That time of the year could be different in vacation spots or areas where people migrate during the summer.
Regardless of the time of the year, merchant cash advance loans provide retail merchants with the opportunity to purchase a larger sum of inventory by providing them with a cash advance based on their current pattern of credit card sales through their processing company. The main objective of merchant cash advance loans is to sell a specified amount of credit card sales in the future in return for a cash advance loan at the current time. This type of arrangement is particularly great for companies in retail sales since they can make up the amount lost through the loan after their busy period.
There is a certain stigma towards loans in general because of the associated debt and difficulties that many face after taking a loan in an unwise decision. It is generally a good practice to only engage in loans when it is financially advantageous and advisable. For many businesses a loan is not a necessity, but in retail a cash advance could be the perfect opportunity to maximize the use of the time of the year to sell as much product as possible. Additionally, it could be a time to be able to invest more money into advertising, marketing, or even decorating the retail store in a way that would attract more customers.
Due to the nature of a merchant cash advance loan, the loan is placed against future credit card sales as opposed to a loan being paid back in a certain amount of time. As a result, there is less risk involved in a merchant cash advance loan than would be associated with a general purpose of special purpose loan from a bank or lender.
Merchant cash advance loans are a great multi-purpose solution for busy seasons for retail businesses. They can also be a perfect tool for service-related businesses that also require more funds during a busy time or during a time of expansion.