Using Your Merchant Cash Advance Wisely
As with any form of funding, careful and thought-out application of assisted funds can be a huge benefit to your business. While it may be tempting to use the money to quickly procure fleeting wants, thinking about the long term of your business and how to wisely distribute your funding into areas that will not only meet temporary needs, but help provide a sustainable business model is what it’s all about.
What are you planning on doing with it?
One of the first steps you need to make in order to get maximum benefit out of your advance is to plan ahead. Where is this money going? How much of it is devoted to each growth facet? Having a well throughout plan can help you make sure that every penny goes to keeping you in business, not burdening you with unnecessary extra expenses from purchasing habits that will only perpetuate debt. The purpose of getting an advance is to help make ends meet, not create new debt.
Using advances for emergencies
Emergencies do happen, and not having any allotted capital to help pay for it is a bummer. When used carefully, a business cash advance can help you stay afloat in the event of sudden, unexpected expenditures. These situations are born out of necessity, rather than just a sporadic venture. A cash advance can help you get by if you don’t have time to wait.
Understand your payment system
One nice feature of a merchant cash advance is the lender is paid when you are paid. How it works: the lender will take a portion of your credit card processing on a per day basis. Understanding how the payment system works will help you be able to work around paying back your advance. As long as you are still generating income, the debt will be paid off in a timely manner.