Hospitality operators, new or established, are well aware of how finding finances to start up or grow their business has become tough over the past years. The people who are working in the hospitality industry agree that bank lending isn’t the same as it used to be. Getting loans from traditional banks is quite complex nowadays with so many formalities, comprehensive credit checks, and much more, which are difficult to meet, especially for the startups. One form of hospitality financing that is gaining popularity is the Merchant Cash Advance or MCA.
Cash Flow is Key
Whether you own a hospitality business or are in the construction industry, as a business owner you know that a smooth cash flow is important for the success of your business. And, merchant cash advances will make sure that your loan requests are processed quickly and won’t let the money factor hinder your growth.
The merchant cash advance industry is booming right now, ever since the traditional loan providers have tightened the regulations for businesses. If you are in the hospitality business and find yourself in the need of easy and quick funding sources, then a merchant cash advance loan is for you. It will help you meet your business’s operating costs and have a smooth cash flow. Also, if you plan to expand your business and are in need of additional equipment or staffing, then a merchant cash advance loan will be your perfect option. In fact, even if you are in need of short term financing, MCAs are the most feasible solutions.
How a Merchant Cash Advance Works
Merchant cash advances are quite different from a bank loan. Unlike the traditional loans that have a fixed repayment plan with a set interest rate, merchant cash advances recoup their funds by collecting a percentage of the business’ total credit card sales each month, and sometimes even each week. So, MCA loans are ideal for businesses that are set up to accept credit card payments.
Benefits of MCA Loans
As specified above, merchant cash advances take very little time to process. This means that you have the working capital almost immediately, right after you apply for the loan. This is a noteworthy advantage for business owners who want immediate cash and cannot wait for long processing practices, which are typical of many banks and renowned lenders. Another great advantage that makes merchant cash advances your topmost choice is the easy processing: no formalities and no eligibility criteria. Unlike bank loans that involve several formalities, a lot of paperwork, credit history and more, MCAs are much easier.
One of the major benefits of this type of loan is that the repayment is easier. Merchant cash advances recoup their funds by collecting a percentage of the total credit sales, which can be done either daily, weekly, or monthly. This works in the business’ favor, particularly when the sales are slow at first. For small business owners who are not able to meet bank’s criteria to get loans or have poor credit ratings, an MCA is an ideal choice. Merchant cash advances offer high approval rates which means that the chances of securing capital is comparatively higher.
So, if you are in the hospitality industry and are planning to take your business to the next level and you are looking for an easy funding source, then an MCA can work for you.