“We only make money when you make money” – With MCA say hello to Flexible Payments.
“We only make money when you make money” - With MCA say hello to Flexible Payments.
As we all know setting up a business is like a gamble; you don’t know what the outcome would be or what the future holds, as it is quite unpredictable and there are many extraneous variables and factors at play. You might win big or could simply lose it all.
Thus, the business owners need to play or ‘gamble’ smartly and opt for a financing solution that not only provides financial support in times of need but also allows the owners a flexible payment schedule. In times of financial crisis, the last thing a business owner needs to stress about is paying off the loan within a specific period of time, especially when the business is going through a dry spell.
In such cases, MCA proves to be a smart option for business owners who require adequate capital to attain a short-term goal but at the same time do not want to worry about paying it back immediately or in a specific period of time.
How is Merchant Cash Advance Payments Determined?
The word ‘borrow’ literally means to take something belonging to someone with the intention of returning it. Thus, borrowing money or taking a loan automatically implies you have to return it or pay it back. In the case of MCA, the lenders take a portion of your future credit sales, until the amount is fully paid off.
There is no fixed time for the repayment as it is contingent upon the amount borrowed and the percentage of your interest rate. Nonetheless, you can expect them to take anywhere from 4 to 18 months to pay back.
Moreover, as repayments are made as a percentage of sales, they fluctuate and vary proportionally with your business’s income. Which means that when things are going well, and the sales are booming, you pay back more each month.
However, if the business is going through a rough patch and the sales are not so great, you will have lower deductions from your sales. This is particularly great for many companies, as it guarantees a stress-free process of repayment even when your company is going through a setback.
Furthermore, since the MCA provider works directly with the card terminal provider, and all the loan sanctions are based on the current credit card sales statement, you can repay the whole amount any time you feel you are able. That means you can spend more time running your business rather than worrying about finances.
Therefore, MCA is a much better option (in terms of flexible payments) as opposed to bank loans. As they require you to pay instalments in a fixed period of time irrespective of how your business is performing. While repayment of MCA is only made when you make sales, otherwise, it won’t take a dime off you.
