Cash Advances
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What are some of the potential uses for a cash advance?
How does one finance a small business?
How can cash advance finance my business growth?
What is the role of margin in cash advances?
What are some of the potential uses for a cash advance?
If you find that a merchant account cash advance service may be right for your online business, you can use it for many purposes aimed at growth. A word of caution, never use cash advances for your business to pay personal expenses or your salary. The power of cash advances lie in their potential to use cash flow to grow your business, not to provide returns to the principals.
What are some of the potential uses for a cash advance? Expanding the scale of your business is one large category of uses for such a financial instrument. Acquiring more inventory to sell, better software/equipment to expand and serve your customer base, revising your website, promoting your business, or entering new market spaces are all ways that you can wisely utilize Trans business cash advance program. Call your service representative and apply today. Be aware, some restrictions and qualifications are involved with this program, so talk to your rep soon!Back to the Top
How does one finance a small business?
Capitalization (or lack thereof) is the driving issue for every business, whether large or small. According to the U.S. Small Business Administration (SBA), lack of adequate capital resources is second only to poor management as a reason for small business failures. How does one finance a small business? There are many ways that range from using your own funds, to bank loans, family/friends, private equity sources, and the U.S. government. However, it is important to note two things: 1. Most external sources of funds (e.g. non-private or family related) require the start-up businessperson to have substantial financial resources or unique product and/or intellectual property (patents, trademarks, etc.) in order to qualify. Even the famous and very valuable SBA loans are done through banks and require "collateral." 2. eCommerce has the unique characteristic; it does not require the same cash-consuming elements of a brick and mortar business location. This is the principal reason it has grown so explosively in the past decade.
eCommerce is, therefore, one of the best ways to start a small business using your own capital to achieve a state of sustainability for the enterprise. Grow using the revenue you gain from each transaction. Be prepared to not take a salary for some time so you can keep "plowing" the funds you take in back to the purchase of more merchandise or product. When you reach a level of equilibrium, and you have and move significant quantities of goods, generating measurable cash flow, then consider formal financing from one of the many sources.
To avoid the cost, effort, and anguish that are often related to finding cash, speak to your First Data Independent Sales representative about the benefits of using your merchant account as the engine to fund the next level of growth for your business. This alternative source of capital is an easy way to prosper for many businesses.
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How can cash advance finance my business growth?
An optional source of business capital, if that’s what you are interested in, is offered by merchant service provider First Data Independent Sales. This form of financing is based on a well-established business practice that provides a means to borrow or advance funds to a business, using inventory or receivables to underwrite the transaction. Business cash advance services offered by merchant account and merchant service providers are a convenient way to leverage your inherent business cash flow with the proven underwriting criteria contained in a merchant account. It is not a formal loan, per se, but a means to access additional margin-related cash contained in your daily transactions.
As with all forms of business financing and capital, prudence is required when availing your business of this service. Your First Data Independent Sales representative can advise you on the benefits and dangers associated with business cash advance solutions and associated costs and fees. Utilize the vast wealth of experience they possess to structure a cash advance program best suited for your business. Back to the Top
What is the role of margin in cash advances?
We have learned that cash advances may be valuable as a capital tool for the small business. Leveraging the power of the revenue generated when you accept credit cards online and other electronic payments through your merchant account relationship may hold the key. This power is manifested in the concept of margin when it comes to how to safely use factoring-based cash advances in your business.
Margin is defined by the Merriam-Webster Online Dictionary as “…the difference which exists between net sales and the cost of merchandise sold and from which expenses are usually met or profit derived.” If you, as the small online business owner, fully understand the make-up of each dollar of sales, in terms of costs, overhead, general and administrative expenses, and profits then you may be sophisticated enough to consider cash advances as a tool to business growth. This potential must be considered with full understanding of the realities of your business; for example, debt management is required, new merchandise must be constantly procured, and operational expenses must be kept current. Speak with your First Data Independent Sales representative to explore business cash advance services and determine if it is an option for you.Back to the Top
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