According to the Small Business Administration, small businesses are so dependent on cash flow that when someone doesn’t pay them on time they either must cut costs (which often harms the growth of their business) or find an alternative source to bring in cash. There are a number of ways how a cash advance frees up your cash flow and helps grow your business.
Meeting Payroll to Keep Skilled Employees
One example of how cash flow can harm your business is when your payroll suffers. Imagine that everything is going well in your small business. You’re gaining new customers. You’ve hired some of the best staff around and spent time and money training them to work to your standards. Unfortunately, your customers don’t pay you on time and you find yourself in a budget crunch to meet payroll.
Since losing skilled labour will harm your business’ growth, you need cash flow to pay your employees and you need it now. A cash advance can be a short-term solution to this problem until your business is a bit more viable.
Funds to Pay Your Bills
Another example is when you owe suppliers for the merchandise they’ve supplied you with, but you are waiting for payment on a big order. This is another time when taking out a merchant cash advance can keep your business running smoothly and get you past growth spurts.
While the ideal situation would be for every business to have the recommended three to six months in savings to meet payroll and pay any rent, utilities and suppliers, some small businesses simply can’t come up with that amount of money upfront when their business starts to grow.
Drawbacks to a Cash Advance
Obviously, you will need to pay back your cash advance. This is only a temporary solution to help keep your business viable. A cash advance expert can help solve this problem with a variety of creative solutions that will ensure you have the cash to run your business today and the funds to pay back your advance when you need to by looking at things like credit and debit receivables.
It’s surprisingly simple how a cash advance frees up your cash flow and helps grow your business. A merchant cash advance can get your company through those growing pains and help you become more successful than ever before.
Disclaimer: A merchant cash advance is the purchase of future credit card or debit card sales and is not a loan product.
