Thirty percent of small businesses in the U.S fail in the first five years, and 82 percent of businesses that fail do so because they run out of money. Those are interesting stats, especially when you consider that 25 percent of those that do fail never seek outside funding. These statistics might look more favorable if more of these business owners knew about cash advances for retail merchants.
It’s been said that retail is dead, but all evidence contradicts that.
Retail facts to consider
- Each year, retail accounts for $2.6 trillion in sales in the U.S. alone and more than $26 trillion worldwide.
- The average gross income for small to mid-sized retailers is $22,340 per month.
- Retail sales are expected to increase by 4.7 percent in the U.S. in 2019
This tells us that the markets are there, but they must be tapped into. The most effective way to do this is to infuse the money where and when it’s needed. The thought of “throwing cash at a problem” has become cliché because it’s true; cash is the great equalizer, but it’s only effective if it’s used effectively. This may be truer in the retail world than anywhere else. What good is having cash to expand your business, if you don’t use it effectively?
When researching ways retail locations can build sales, the same three areas come up repeatedly:
Training – The retail realm is fraught with stories about businesses that had a marketable product, but which failed because they didn’t have a competent sales staff.
Marketing – You’ve got the product and the staff, but if you don’t market your location and your brand, it could be all for naught. It has been said that “marketing is everything,” and, while it’s not, it sure is a lot of it. Ready cash can help you market your brand, especially in the all-important digital realm.
In-store visuals – People won’t buy merchandise that doesn’t appeal to them, and in-store visuals help make your merchandise more appealing.
These are just three of the many ways a retailer can use a merchant cash advance to increase business. For many retailers and for different reasons, cash advances are a more favorable way to obtain funds than other sources.
Advantages of Cash Advances for Retail Merchants
Get cash quickly
You could be waiting up to three months for a bank or SBA loan, and most retailers can tell you that things might get too far into the red in that amount of time. Cash advances are approved within an hour, and the funds are almost always in hand within 48 hours. That’s comforting to know when the life of a business moves fast and things come at you quickly.
Advance is based on a business’s receivables
Merchant cash advances are based on your business’s receivables, and they are repaid in such manner. Your ability to borrow is based on past business. Your repayment is a percentage of each business day’s credit card sales going forward.
No collateral required
A business just needs to prove that it can do business, has done business, and will continue to do business. The ability to repay the advance is based solely on that.
Entirely too many good and viable American retailers are failing because they don’t have money when they need it. It’s just not necessary, and merchant cash advances provide a positive solution.