Merchant Cash Advance
Merchant Cash Advance is most suited to hospitality and retailers. Your future sales support the repayment of the advance.
Unsecured Advance
Based on 90% of business sales. No collateral. Protect your assets
No Financials
To $100K. ABN and trading 9 months. Clean credit
Flexible Repayments
Terms from 3 to 18 months with flexible repayments
Benefits of Merchant Cash Advance
These business cash advances are best used as a short-term funding facility where the cost of the money is lower than the benefit from the funds. Merchant cash advances do not appear on your balance sheet.
Suitable Businesses for Cash Advances
- Retail and hospitality with high EFTPOS sales
- Purchase inventory to cover peak seasonal demand
- Employ and train extra staff to meet customer expectations
- Seasonal businesses located in tourist areas
- New business owners not eligible for bank finance
- Minimal assets to provide for collateral
Advantages of Business Cash Flow Loans
- High approval rate over bank finance. Repayments assessed on current and future credit card sales
- Ideal for retailers with high merchant transactions. No fixed installments and term
- Merchant Cash Advance is simply leveraging off your future customers to fund your business growth
Repayment of Merchant Cash Advance
- Your approved provider will setup a pass through account on your behalf
- Holding back the agreed percentage of your daily credit card receipts until the full advance is paid back
- The typical rates are 10-30% based on your industry and credit score
- The remaining sales balance is sent to your business bank account as a daily deposit
Cash Flow Finance
Merchant Cash Advance Solutions
Merchant cash advance does not suit every business and is certainly not a long-term funding solution. As this is an advance against future sales, the owners must manage the needs of the business and the ability to pay back the merchant cash advance without impacting daily operations.
- Purchase new stock or equipment, hire and train more staff, upgrade shopfront or renovate your office
- Fund a new franchise, or franchise your existing successful brand where you can leverage off future income
- Pay off urgent debt or consolidate tax and superannuation liabilities to improve your cash flow
- Need to pay for goods being imported before leaving the dock or shipping and delivery costs
- Marketing costs to launch a new product, run an event to build brand awareness
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How to Qualify for Merchant Cash Advance?
- Merchant must be owner & trading for 9 months plus
- Minimum of 10 different customer deposits
- Minimum business turnover of $10K per month
- Require 6 months banking & merchant statements
- Merchant should show positive bank balance
- Credit score above 500+ with paid defaults
- Cash advances over $70K require financials
Alternative Business Loans
Accrutus Capital has solutions to improve retailers cash flow gaps via multiple working capital facilities.
Retailer should consider Merchant Cash Advances which are designed with speed and simplicity. Ease of repayments through daily, weekly or monthly schedules and automatically deducted from your bank account. No checks to write, no transfers, and no surprises, its short-term funding without the stress so you can focus on making money.
Retailers and the hospitality sector mostly qualify for Merchant Cash Advances due to their high credit and debit card sales, operate form leased or owned premises and experience seasonal cash flow high and lows.
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Merchant Cash Advance industry wrap
Best suited to the retail and hospitality industry where the business can take 2 years to be stabilize and build a loyal and consistent customer base.
Seasonal businesses especially those located in tourist areas can use a merchant cash advance to stock up in readiness for the new season’s customers.
Stiff competition from online retail sales, changing demand from export markets, fluctuating exchange rates and changing consumer trends are significant issues in managing cash flow. Plus having to compete with the bargaining power to major retailers your cash flow can receive a battering.
Shortage in working capital can prevent a company meetings its payroll and damage supplier relationships if accounts are regularly overdue. If managed responsibly, a Merchant cash advance can smooth out cash flow gaps and help you negotiate discounted terms with your creditors.
Every small business will experience late payers during its existence. Whether this from many small monthly customer’s or one large client from an ongoing project, it can leave SMEs struggling with cash flow problems due to the payment gap between products or services delivered, and the invoices paid.
If this toxic customer payment pattern continues for weeks or even months, it is time for a small business to look for alternative capital to alleviate the cash flow problems affecting its business. The solution could be through unsecured business loans to provide the much-needed short-term funds or invoice financing to cover this gap. More information on short-term business finance option on our FAQ page.
The other option is collections and engaging a solicitor in demanding the invoices owed are repaid where the age of the debt is 60 days plus. Many small business owners are reluctant and cautious about upsetting existing and new customers plus the added expense and time of chasing late payments through legal methods.
To better manage the financial stability of the business; accessing short-term business finance are a proven strategy to smooth cash flow. When a smart business operator can preempt, deal with and prevent late payments, the small business will undoubtedly be more profitable, enjoy consistent growth and enable expansion through equity investment, which ultimately guarantees the business a bright future ahead.
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Merchant Cash Advance to manage your capital
Cash is simply the flow of cash through the company over time. Working capital is required to pay for wages, daily functions to provide the goods and services being sold. The cycle repeats where the revenues received provides new cash that can be used to finance further productions and sales and increasing the companies economic value and profitability.
As a business owner you must tightly manage the cash flow generated and what factors impact those flows. This is a business skill essential to the liquidity and long-term viability of the business. While a company can have solid income and assets and be profitable, there are times when cash is short and other financing methods needs to be implemented.
For high merchant transactions business, working capital can be accessed through your future sales via the merchant cash advance facility. The management of working capital involves managing 4 aspects within a company.
- Inventory (stock or goods still being production)
- Accounts receivable (debts that are owed to the company)
- Accounts payable (money the company owes to suppliers)
- Cash
