Merchant Cash Advance For Convenience Stores

Merchant Cash Advance For Convenience Stores

Running convenience stores is a substantial business and is becoming very popular. Adequate spacious premises and a range of stocks, which are in demand and are of daily use type are required to be sufficiently stocked at all times. Financial resources are required all the time to make up for all the exigencies.

Various options to meet financial requirements are available.

Bank’ finance: Bank’s can finance such ventures. The credit needs are worked out by the bank by way of their own analysis mechanism. Banks study the financial statements, trading accounts to assess the capabilities and worth of the business. It takes time to analyze the requirements. Then there is the documentation process which normally is quite cumbersome. Having analyzed the credit needs and completing modalities of documentation banks ask for collateral, to cover the loan amount. This is by way of third party guarantee worth the loan amount or mortgage of property. The collaterals are always difficult to obtain because the third party guarantee should be as per the bank’s satisfaction or the mortgaged property should be without encumbrance and should have a clear title.

The procedure is quite lengthy and involves considerable time. Checking the documentation modalities banks fix the repayment schedule. The repayment of loan has to be strictly adhered to failing which the loan becomes a non-performing asset and the loan amount can be called up in one go or else the legal modalities might follow. All the purchases have to be made with bank drafts. These measures leave no scope for cash discounts to the borrower. The whole process is very tedious and cumbersome.

The second option is resorting to borrowing from open market. This involves lot of risks as such finances are available at a very high rate of interest. If the business does not show a rise despite such borrowings, it is crisis for the business and the whole project is likely to backfire.

Instead it is advisable to evolve a strategy and carefully plan ways to improve business. To give a steady growth to business sale through cards should be encouraged. This would indeed be a great move for it will work manifold. On one hand it will give an incentive to the customer to go for purchases as per his liking and defer expenses on cash as per his convenience and on the other hand will give a boost to the business. The sale through cards will provide a great base to the enterprise.

Merchant Cash Advance is another valid option. Such advances depend upon good card sales of the concern. The greater the card sales the easier it is to avail merchant cash advance. Such advances are less cumbersome to obtain. There are no fixed repayment schedules.  The monthly card sales form the basis. On monthly card sales average future credit sales are worked out. The installments for such advances are recovered upfront from monthly card sales. A small amount is recovered upfront in the beginning of the month. There is complete freedom to use the advance as per requirement of the enterprise. Cash crunches at times in the business are also adequately met and the business works without any hiccups.

This option is the best of all options available to the enterprise. Such advances take care of all aspects of the business and are without undue hassles. Merchant Cash Advance helps in running the business smoothly and the enterprise tides over all the financial problems that might crop up at times. 

If you like article, you might also like

Next entry

Previous entry

Related entries

Similar entries

Facebook Google Plus Linked In Twitter Youtube