Why the Merchant Cash Advance is Important

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February’s Issue of Entrepreneur magazine features an editor’s note from Entrepreneur Editor-in-Chief, Amy C. Cosper.

In her note, Cosper explains the importance of credit for small business owners and the havoc that can be created when that credit is denied and/or revoked.

The note includes some astonishing statistics.

• 38 percent of small businesses reported a decrease in lines of credit (National Small Business Association)
• 40 percent of small business owners who requested extensions to their lines were denied (National Federation of Independent Business)

One sentence, however, stood out from the rest, illustrating the extreme importance of an alternative to traditional business funding methods.  “Across the country, [entrepreneurs] have been left scrambling to find emergency operating capital in a market where credit is damn hard to come by,” wrote Cosper.

Many small business owners have been able to find solace in a merchant cash advance.  Even when their banks have refused to extend lines of credit, they have been able to receive up to $500,000 in business cash through merchant cash advance lenders who advance funds based on monthly credit card sales.

The problem is too many small business owners are either unaware or wary of this business funding method as it is relatively new in comparison to bank loans and lines of credit.

Instead of completely writing off the business cash advance as a prospective business funding method, it is important that small business owners take the time out to understand exactly what they can gain from taking advantage of a business cash advance.  It can make a world of difference in their businesses.