As we all know that cash flow is the livelihood of small business industry. Bad cash flow management can obstruct your business performance and can kill your business. Thus, proper cash flow management is essential for smooth business performance and efficient growth.
But life is what happens to you when you are busy making plans and every so often you have to deal with cash flow gaps, and that’s where a merchant cash advance can lend a hand. A merchant cash advance also called business cash advance can assist in running things efficiently during hard times when much of your cash is tied in different business operations like inventory purchase or expansion.
Business Bottom Line & Cash Flow Gaps
A business’ bottom line is basically the profit of a business after all the expenses are paid off. Every business owner wants to have increased sales and lower costs.
Every growing business wants to draw more customers, and keep them returning by ensuring having the products/services they want to buy in. Certainly, it’s toilsome because doing all this requires a lot of money. Getting more customers mean spending more in advertisement. Customer retention can ask for various loyalty programs directly or through discounts. Also, making sure you have enough stock will also cost you money. So, to make all that happen, you will require money to do so.
Merchant Cash Advance To The Rescue
After you get a merchant cash advance, you probably had sufficient inventory to make more sales and retain the customers. You might have seen a progress in your bottom line by considering the merchant cash advance cost and the discount you’re selling at. The more customers you serve well, the more you can retain.
In essence, with a merchant cash advance funding, you can have increased daily sales with improved profit margin and more customer’s retention. A higher customer retention rate means more customers spending and in turn, more sales and higher profit margins.
How Merchant Cash Advances Fills Your Cash Flow Gaps?
If your business is having a cash flow issue, you will probably less worry about the cost of acquiring money and more about getting it. You might can get a loan with lower interest rate, but there’s a risk of business failure before you get a loan approval. But with merchant cash advance, you get the funding approval in just 1 hour and approval within 2-3 days, which is exactly what you need with a cash flow gap. The cost of getting a cash advance might be a little more, but the repayment structure is more beneficial and flexible than a bank loan.
You’ll pay a fixed percentage of your monthly sales to the merchant. The flexible repayment means you will pay less if sales drop, and pay more when you made more sales. With fixed monthly loan repayment, you not only cover your cash flow gaps and keep business running efficiently, but also guard yourself from running into the cash flow problems in the future.
Merchant cash advance is a great source of filling cash flow gaps precisely since the repayments structure varies with your business cash flow, which lower the risk of facing more severe gap afterwards. On top of that, the fickleness of cash flow gaps frequently make it hard to get a bank loan especially when you really need it, while with a merchant cash advance, it just takes 1 hour for approval and days to get the money.