Benefits of merchant financing for business
Cash flow can be a major problem for every business from time to time. Even a profitable business can experience financial strain, under certain circumstances. When payroll, inventory invoices, and space rent all come due at the same time that you’re dealing with flood damages, or a break in, financial chaos might be just around the corner.
If you’ve ever been in that position as a business owner, then you know that getting the financial help you need, when you need it, is easier said than done. Bank loans can be difficult to get, have strict terms, and take time to complete. Your doors could be closed before you have the money in hand. What you really need when money is tight is a merchant financing solution.
Merchant financing isn’t exactly a loan. It’s more like a cash advance. Usually, a payment processing company, or a third-party financing solution agrees to give you money up front, and recoup it through your credit card receipts on a monthly, or daily basis. Instead of writing a check to a lender, the payment processor facilitates repayment through a certain percentage of your daily sales, and deducts the amount from your monthly deposit. You don’t even have to write a check.
Merchant cash advance providers will even let you set the terms of repayment. So you can decide to repay a small amount in a short period of time, or a larger amount over a greater period of time. The flexible repayment options and automated deductions from your credit card sales make it easy to repay and reduces the likelihood of defaulting.
One of the biggest benefits of a cash advance through merchant financing is that you can spend the money on whatever you need. With merchants going out of business left and right after experiencing the all-to-common data breach, many are choosing to leverage merchant financing in order to upgrade their card data security. A PCI-compliant POS system that uses encryption and tokenization to protect data is a smart investment that may require financing. Or it may be necessary to upgrade to an EMV capable terminal to avoid liability for fraud chargebacks and protect your business from hefty chargeback costs and fraud losses. With merchant financing, you have the freedom to choose.
You can learn more about merchant financing solutions from your payment processing partner, or possibly your POS dealer. Make sure to ask about the terms of repayment, as well as the provider’s processing services as you will be required to process all of your transactions through them for the duration of the repayment period. Contact Vantiv for more information and tips on using reputable merchant financing solutions.