Why Should motels use MCAs instead of loans?

There are alternative financing sources for small businesses besides loans and lines of credit. Merchant cash advances (MCA) have been around for a long time, and businesses in the merchant cash advance industry were the pioneers in alternative financing. MCAs are not traditional business loans. In fact, they are quite different.

A merchant cash advance is best for a small business that needs some extra money to make their business more competitive and functional. Not all small businesses can get bank loans to do all the things they want to do.

A merchant cash advance company approves your business for a specific amount of funding and provides you with a lump sum of capital up front. You repay the money you received, with fees, using a percentage of your future sales.

A merchant cash advance agreement is a contract in which a lender agrees to offer a cash advance that is to be repaid against future revenues of the business.  

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Advantages of MCA:
​A merchant cash advance (MCA) is a flexible way to borrow money for retail businesses or other companies with a reliable cash flow. If you own a small or medium-sized business and take care of payments, then an MCA offers several advantages.

A merchant cash advance is available to businesses that have been processing credit and debit cards for four months or more. It provides a fast and short-term financing option, calculated by the average monthly card turnover. This type of financing is a perfect fit for pubs, restaurants, beauty salons, hotels, and shops, but many other businesses can benefit too.

There are many advantages to securing a merchant cash advance—here are the top reasons to choose this alternative finance product.


Disadvantages of MCA:

• They are expensive.
• They are only a short-term solution.
• They may not solve your problem.
• Financing future sales are risky.
• Quick setup.
• Simple to obtain.
• Perfect credit is not needed..
• No upfront collateral.

​Cash advance or loan which is right for my business?
​So now that you know the difference between a merchant cash advance and a loan, how do you decide which one is right for your business? The answer is that it all depends on you and your unique business needs. Here are a few things to consider to point you in the right direction.
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Credit: Your personal credit is a key component to helping you establish business credit. If your credit is less than stellar, a merchant cash advance may be the better option.
Banks will look at your business’ overall profits and number of years in business as factors in determining whether you qualify for a loan. Companies that provide merchant cash advances are also interested in the amount of time you have been in business, but they are more interested in your credit card revenues.


Fulfilling your agreement: To repay a traditional loan, you pay monthly instalments of a fixed amount due at the same time each month. Cash advances are different. The remittance is taken out at either daily or weekly intervals, and the amount will fluctuate based on your credit card revenue. If you are seeking a firm repayment schedule, a loan is the better choice.

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Capital utilization: Merchants like you will need capital for a variety of reasons. You need to buy new seasonal inventory and run a marketing campaign, which are ideal uses for cash advances because you anticipate making your money back relatively quickly. 


Are merchant cash advances an innovative idea?
A merchant cash advance is best for a small business that needs some extra money to make their business more competitive and functional. Not all small businesses can get bank loans to do all the things they want to do.