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Why is a Merchant cash advance a better alternative than a business loan?

Updated: Jan 12, 2023

You’re a small business owner, and you require capital right now, but you’re torn about how you should go about acquiring the funds. Two funding options spring to mind – merchant cash advances (MCA) and traditional business loans.

Both options are viable, but when you’re on the hunt for working capital, how do you know which source of funding is the right choice for your business?

While you can use both funding options as a way to cover business expenses – inventory, payroll, equipment, management systems, marketing campaigns, etc. – traditional business loans have a few shortcomings that sets merchant cash advances apart as the quickest funding option.

The shortcomings of traditional business loans

Procuring a traditional business loan can be a long, challenging process. You often have to wait weeks or even months before your loan application is processed by the bank.

Furthermore, your personal credit may be taken into account during the application process meaning your past mistakes may prevent you from moving forward with your future. When it comes to repayment of the loan, you will owe the full monthly payment regardless of how well or poorly your business performs month to month.

Overall, the process of obtaining a business loan is slow and uncertain. Not knowing if your application will be accepted will have you sitting on pins and needles as you worry about mounting business expenses.

The alternative – a Merchant Cash Advance

A Merchant Cash Advance (MCA) provides a quick and efficient way to procure the funds you need to cover your business expenses without dealing with the hassles of applying for a traditional bank loan.

Let’s take a look at a few reasons why you should consider financing your business with an MCA as opposed to taking out a business loan.

High Approval Rate

Banks focus on your past credit history. Merchant Cash Advance providers are concerned with your current ability to pay back an advance. They look at your business’s revenue history, rather than your personal or business credit score/s.

Flexibility during repayment

Bank loans are inflexible when it comes to repayment. It doesn’t matter whether your sales are low or high you will have to repay a set amount every month. Merchant Cash Advances are, by design, a more flexible repayment option.

Because you pay back an advance with a percentage of your revenues, if your business is slow, the amount you pay back is automatically less. When business picks up again, the payback rate rises. MCAs make it easier to weather bad business cycles, as well as pay back the advance a little faster when your incoming revenue is strong.

Successfully secure funding for your business

One of the biggest arguments levied against MCA funding is that you pay higher fees that you often would for a business loan. While this is typically true, many small businesses do not qualify for bank loans. MCAs enable owners of smaller businesses to access working capital quickly and easily.

Are you looking to avoid the hassles of applying for a traditional business loan? Need working capital now? We can help. Amerishop Financial partners with an extensive network of funders who provide merchant cash advances to small business owners.

Our partners offer flexible financing and funding options without the games and hassles associated with traditional bank financing. Apply today to get the funding you need to keep your business on the move.

Visit or call 877.407.9195 and connect with a funding expert to discover the options that make sense for you and your business.

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