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

Updated: Sep 9

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.