Understanding the Products Available to You in the Alternative Business Finance Industry

If you’re a business owner, you’re used to the unpredictability of entrepreneurship and unforeseen expenses materializing out of thin air. The Alternative Business Finance industry offers business owners the ability to mitigate tough situations and to once again find solid ground.

Within the industry, there is a variety of funding strategies available to business owners in need of quick cash or assistance. Most products are characterized by short payment terms, (3-24 months), and regular daily payments. The two most popular products are Merchant Cash Advances and ACH Advances.

A traditional Merchant Cash Advance, (or MCA), is based on an estimate of a business’s sales volume by assessing the business’s performance in prior months. Essentially, a MCA is a purchase of a business’s future credit card and debit card receivables. The purchased price is then paid back daily according to an agreed-upon withholding percentage in exchange for the lump sum up front. The withholding of credit card sales is in place until the purchased price of the advance is paid back.

Good Candidates for MCAs: Businesses with fluctuating sales, such as:

-Retailers

-Bars and Restaurants

-Nail and Beauty Salons

Rather than taking credit card sales volume into account, lenders examine the average daily balance of a merchant’s business bank account for an ACH Advance. Lenders advance a lump sum and then make daily fixed deductions from the business’s account, regardless of the merchant’s sales volume, until the purchased price is paid back.

Good Candidates for ACH Advances: Businesses with consistent sales and little seasonal fluctuation in revenues, such as:

-Medical practices

-Tradesmen

-Auto Repair Shops

-Hotels and Motels

With the right broker by your side, choosing the appropriate funding product for your business will be simple and hassle-free. If you could use extra capital to help pay for inventory, expansion, payroll, marketing, or any other business expenses, contact Cardinal Equity today and begin working with a Cardinal-Accredited broker. We’ll take you under our wing, and your business will soar.

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