Tuesday, May 27, 2008

Merchant Cash Advances for Handling Remodeling Costs

Remodeling and expansion can be good illustrations of how to best use a Merchant Cash Advance. By using the money to create something better in your business, you encourage growth and can increase earning potential.

An Illustration of a Merchant Cash Advance in Action
Let’s say Sarah’s Seafood Shack has been a busy little place in Miami for the past 3 years. Sarah wants to add a larger deck and update the interior to create a slightly warmer atmosphere; one that she feels will bring in more family business.

Sarah talks to local contractors and gets some ballpark pricing on the work she wants to do. When she added in the costs for new chairs, some additional stock and a few other necessities to make it all work, her project had a total price tag of around $32,000.

Sarah estimated that she would be able to add 35% more seating with her new layout, and anticipated her final result would likely be a sustainable 20-30% increase in annual sales. Understanding what she was facing, Sarah felt the anticipated annual monetary increases offset her known risks. She decided to move forward.

The Seafood Shack regularly processes an average of $37,000 in monthly credit card sales, and the busiest season of the year was just around the corner. Sarah knew she’d have to act fast to get her upgrades finished in time to capitalize on the increased traffic.

Sarah applies, and is approved for a $35,000 Merchant Cash Advance. She works quickly, and has the money in hand in less than 5 business days. She immediately invests it in remodeling and upgrading the Seafood Shack as planned.

The work takes about 13 full days to complete. There were a couple of unseen problems, so the total cost was about $34,400—which was still just a little less than she had in-hand and available. Sarah spent $500 on a banner announcing her grand reopening, and re-launched the new and improved Seafood Shack…just in time to take full advantage of the increased traffic of her busiest season.

Some of the Benefits:
Sarah’s illustration points out many benefits that can be had from using a business cash advance to update and upgrade your establishment.
1. It is quick and easy. The application process is simple and the money can be in your hand in as little as 72 hours.
2. Use this money to make more money. By using the money to improve and add into an existing location, you can increase your long-term earning potential. Increased business will also help you to meet your Merchant Cash Advance obligation more quickly—an added perk!
3. Spend it on any business need. In the illustration above, Sarah used money to pay for remodeling and new inventory. When her price tag inflated she was ready with the cash to keep things moving, and had saved enough to promote her efforts with a new advertising banner. Like Sarah, how you decide to spend the money is your decision. A Merchant Cash Advance can be used to answer a variety of business needs.

Remodeling or expanding a successful location is one of the best uses for a Merchant Cash Advance. Applying working capital as fuel for growth strategies is very often how good businesses blossom into great businesses. An old saying goes, “It takes money to make money.” Use a Merchant Cash Advance to remodel and improve the possibilities of your small business, and you will see first-hand that it is true.

What do you think?
If you had the money to do whatever you want to improve your business, what would it be?