Using Merchant Cash Advance

Four Ideas for Using Your Merchant Cash Advance

While businesses have a lot in common, what sets them apart from one another is the particularly needs that they have from one time to another. Consider the sad case of Blockbuster Video – there was a time when you saw their familiar blue and yellow logo in strip centers all over the United States. They were THE leading provider of video rentals, and when video game rentals became popular, they jumped into that market as well. If you drove by one of these stores on a weekend night, you could see families walking around inside picking out the movies that they wanted to watch (and a couple others that they probably wouldn’t watch but still would pay to rent). Then they might grab some treats on the way out.

But then came the onslaught of Netflix. Why go to a store when you can have the videos come through you through the mail? A lot of people still liked impulse rentals, so the Blockbuster stores stayed open, although the chain also opened a rival on-demand service sending DVDs through the mail. But then came on-demand streaming through cable providers and the Redbox kiosks, which allow people to take out DVDs from a machine. Blockbuster came up with their own kiosks, but they have gone the way of the dodo (although you can still find a Redbox at almost any grocery store, convenience store or pharmacy in the States). Blockbuster failed to adapt, and so now they find themselves running an on-demand streaming service on the back of Sling TV – far from the industry leader they once were.

What did Blockbuster need? They would have made a killing by forming a synergy with cable networks to start the Blockbuster channel, which could have rivaled anything Showtime or their competitors were doing. They did not address the need the right way – they followed Netflix and Redbox instead of thinking outside the box.

What to Use Merchant Cash Advance For

As a small business owner, you will find that there are things that you need right away – and you may not have the capital on hand to take care of that need. Maybe it’s updating your inventory; maybe it’s launching a new marketing campaign or acquiring property for an expansion. You have to decide the best course of action for the financial resources that you have. Merchant cash advance funding has been a valuable tool for many of our clients – and here are four of the most common ways that they have put the money to use.

Seasonal Cost Management

Do you operate a bookstore? Or a toy store? You’re going to see sales go up the three months before Christmas – and then drop way off. The good times around the holidays can make up for the suffering the rest of the year, but if you’re a mom-and-pop operation, maintaining the right levels of inventory for each time of year can occasionally require infusions of capital that you don’t have. And your fixed operating costs are not going anywhere (rent, utilities and the like). Many of our clients use merchant advance funding to get themselves through those slow patches in the year.

Inventory, Equipment and Assets

The way you manage your inventory and assets will be crucial to the success of your small business. When you buy your inventory, you’re basically sinking working capital into things that you then place on a shelf and wait for someone to come in and buy or order from you. If you have a brick-and-mortar store, display is important. Do you run a clothing boutique? Then you’ll need to rotate inventory to keep the freshest trends out for people to see. If you are running a sports memorabilia company, you’ll want to be able to acquire autographed memorabilia from the stars who are in the news lately because those are the athletes that people will want to collect. If you’re running a hoagie shop, you might need to get a new oven or other new kitchen equipment at an inopportune time financially. Merchant cash advances make it possible for you to do those things when you need to.

Growing Your Business

Your business might come to a crossroads, and you’ll have to decide to take a risk. You have a successful seafood restaurant going, and things are really booming. All of a sudden, you hear that a restaurant in another part of town is going under and their lease might be available – and if you can move quickly, you can lock in today’s rent instead of waiting for the next cycle of increases. Do you make the jump even if you don’t have the funds to do so in savings? This is when a merchant cash advance could make all the difference.

Expanding and Renovating

If you’ve ever watched any of the episodes of Robert Irvine’s show Restaurant Impossible, then you know that appearance goes a long way. Even if you keep a cleaner restaurant and kitchen than some of the miserable places that appear on that show, you might need to update the look of your restaurant so that it will be more visually appealing. If you’ve had the same kitchen equipment for 25 years, you might want to think about updating it to save on utility costs. These are times when a merchant cash advance can push your restaurant up to the next level – or any business that just needs a fresh coat or an expanded space.

If you are curious about what we can do for you, contact Amansad Financial to learn about the different ways that we can help you with a merchant cash advance. Before you call us, though, put some time into developing a strategic plan for what you plan to do with the money – and how it will help you grow. This should not be a check that you cash and then divvy up to creditors. Instead, it should be the seeds for growth in your business. We can help you with suggestions from plans that other clients have put together once you’ve started. We’ve been helping business owners in Canada for decades now – and we look forward to working with you too!

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