Wednesday, August 20, 2008

Using a Merchant Cash Advance to Fuel Growth

While there can be many uses for a Merchant Cash Advance, the best are those that directly fuel small business growth. Ideally, you want to use the money you receive to create or build on an opportunity to make more money.

There are many examples of this seen in published Merchant Cash Advance success stories. If you own a restaurant, you can add seating, or perhaps expand your hours of operation. Add a new piece of kitchen equipment or expand the floor plan to accommodate more guests. Because of the increasing costs of food and fuel, many restaurateurs are considering menu revisions or concept repositioning to stay competitive and profitable in today’s economy.

A retail store could expand product lines or invest in new marketing. Create advertising that brings in new customers, or offer new services to your existing clientele. Increase the amount of products in your store or add another check-out counter.

An automotive repair or after-market installation business could invest in new equipment or training that offers more services to the clientele. It could buy a new truck and radios or cell phones to provide emergency services.

In each example, the business invests in a way to increase revenue generating activities, and this is a smart way to spend the proceeds of a Merchant Cash Advance. Use the money to create or take advantage of an opportunity and you are typically using it wisely.

Look At the Long Run
If you are considering applying for a Merchant Cash Advance, as like any important decision, you should identify how it will benefit you in the long run. Merchant Cash Advances are more expensive than other forms of raising working capital, such as loans or leases. If a long-term return is not clear, you may want to reexamine your motives for choosing this option. It’s best to match your need to the right type of funding whenever possible.

A Merchant Cash Advance is best used to invest in progress. Because this is not typically the most inexpensive option to evaluate, the ends should clearly justify the means. When they do, a Merchant Cash Advance can often be used as a smart and simple solution for securing the capital to begin many growth strategies.

What do you think?
Are estimating long-term results an integral part of your project planning?