If you’re a business owner, you’re probably familiar with the struggle associated with securing funding from a traditional lending institution. They dig up your credit history from a decade ago, give you a dizzying array of paperwork to decipher, and frequently drag their feet in giving you an answer until the opportunity you saw has passed you by.
Businesses with a lot of credit card revenues have a more convenient option available to them: the merchant cash advance. A merchant cash advance is an alternative form of funding that gives you a lump sum of money in exchange for a small percentage of your future credit card receivables. There are no restrictions on how you can use the money, and paying it back is a breeze since it is attached to how much business you are doing. For example, if the business is slow for a month, your credit card receivables are down, meaning that your payment for that month is also lower than usual.
Any company that takes credit cards is a good fit for a merchant cash advance, but some are particularly suited for this financing solution. Here are the four industries most likely to benefit from a merchant cash advance:
Restaurants have a lot of options for spending a merchant cash advance. Opening a new location, upgrading an existing location’s cooking and storage equipment, improving energy efficiency, adding catering and/or delivery service, and purchasing a food truck can all help a business to grow. Alternatively, the money can be used to balance the volatile nature of the business, ensuring that regular expenses such as rent and payroll are always met.
Restaurants can also be expensive to open, as you need to consider the construction to optimize the space (including a commercial-grade kitchen), rent and security deposit, licensing, and insurance in addition to the obvious expenses such as food, beverages, and employees. A merchant cash advance could be the best way to become your own boss in the restaurant industry!
Like restaurants, the retail industry can be a fickle beast. The freedom of a merchant cash advance allows you to reorder hot inventory, staff up in anticipation of a peak period such as the holidays, or simply ensure that all of your regular bills are paid even during slower periods.
Starting a retail business is also an expensive enterprise. You might spend in excess of $4,000 just to prepare the space, another $3,500 for the shelving needed to display your merchandise, and thousands more for rent and initial inventory. A merchant cash advance may be the only chance you have to open the store of your dreams!
3. Fitness Studios
Exercise equipment can be expensive, especially for startups that also need to worry about rent and utility deposits. Many gyms also have a small juice and snack bar, making the business feel like a restaurant at times. According to Statista, in 2016 fitness centers had total revenues of 27.6 billion dollars. If a traditional bank won’t give you the funding you need, why not look into a merchant cash advance?
4. Salons and Spas
Salons and spas are all about the customer experience, and that means investing heavily in technology. If you allow customers to book appointments through a convenient app and customize their experience through an electronic “menu” of services, they will quickly become loyal to your brand. You can also use the proceeds of a merchant cash advance to hire additional staff, upgrade equipment, or increase your marketing spend!
As previously mentioned, the industries above are among the many that can benefit from the freedom offered by a merchant cash advance.