What to Know About Getting a High Risk Merchant Cash Advance

What to Know About Getting a High Risk Merchant Cash Advance

If you want some extra working capital for your business, a high risk merchant cash advance may make the most sense. But it’s important to choose a provider you can trust. High risk merchants usually have to pay more. You want a merchant cash advance that adds to the financial health of your high risk business.


What Can a Merchant Advance Be Used For?

There are very few restrictions concerning how you spend your business’ cash advance funds. The freedom is great because it gives you the flexibility you need to make the best financial moves for your business. Here are some examples of the things you can use your high risk merchant cash advance for:

Paying your employees – Sure, this may not be the best use of a merchant cash advance, but it is allowed. You don’t want your business to depend on outside funding to meet payroll, but there are occasions when this approach make make the most sense. Using the funds of your advance can be a great solution for preventing the disruption of your cash flow while meeting your obligations.

Expanding your business – If you have the right strategy, growing your business can grow your revenue. In this case, the funds of your high risk merchant cash advance become an investment that brings in returns. Investing in business growth and expansion can be an excellent use of the funds. The best scenario is that the resulting increase in revenue more than covers the cost of the advance.

Purchasing inventory – Experiencing a sudden influx of new customers or a large order can be exciting. But it also places a lot of strain on some businesses, as they struggle to keep up with demand. If you get a high risk merchant cash advance, you may use the fund to buy the inventory required to fill large orders and satisfy increased demand.

Buying equipment – Has a vital piece of business equipment suddenly experienced a breakdown? Such a situation can halt your business activities, resulting in lost revenue. If mismanaged, it can even have a disastrous effect on your reputation. You wouldn’t want that! You can buffer the effects of a sudden breakdown or help your business operate more efficiently by using your merchant cash advance to purchase the equipment you need.

Choosing the Best Lender for High Risk Merchant Cash Advance

Getting your high risk merchant cash advance from the right lender is so important. There are very few lenders who are willing to take on the risk of lending to a merchant in your category. High risk merchants are labeled as such because their business is in one or more of the following situations:

  • Theirs is a home based business
  • The industry they’re in has a high rate of fraud or questionable legal standing
  • Their financial liabilities are large, and/or they file more than $200,000
  • The business or business owner has poor credit
  • It’s a new business or the business has a new owner

There can be other reasons why a merchant is considered high risk. When you’re a high risk merchant, getting a merchant cash advance may be your best funding option. This is because a merchant cash advance, or MCA, is based on your credit card sales, not your credit.

Funding an MCA can seem less risky for lenders, as the money is repaid through your credit card processing. It can also seem more risky to lenders than other forms of funding, since, unlike most loans and other types of business funding, you don’t have to put up collateral.

Still, you have to be careful about who you get your high risk MCA from. Already the interest rates on this type of business funding comes at a higher interest rate than a business line of credit or a traditional loan. The rates and terms should be made easy for you to understand. There should be no hidden fees or charges. Choose an MCA provider who makes providing quality customer service a top priority.

Why Hawkins for High Risk Merchant Cash Advance?

Hawkins Merchant Solutions is a broker, not a lender. Working through a broker sets you at an advantage when getting a high risk MCA. If you have a broker whose focus is on serving you and the needs of your business, they take care of all the hard parts of the process for you.

Indeed, the best way to get the best high risk merchant cash advance is comparative shopping. You would get quotes from a variety of lenders and weigh the offers against each other. Time, insight, and organization are the main challenges of this approach. It takes time to find all the potential lenders and contact them. It takes insight to wade through their terms and understand the jargon. And keeping all that information straight without overwhelming your inbox, voicemail, or desk takes impeccable organization skills – though we’re not doubting you have them.

If you’re going to apply for a high risk merchant cash advance online, be cautious. Make sure to never give your information to an organization that will sell or misuse it. At Hawkins Merchant Solutions, we only collect and use your information to find you the best cash advance offer.

Instead of flooding your inbox, we compare the best offers for you, organize them, and then present them to you either on the phone or on an online meeting. We show you the best choice, explain why it’s the best choice for your business, help you apply, and then monitor your account for you to make sure the choice remains the best option for you and your business.

When getting a high risk merchant cash advance, you want a simple process and an outcome that benefits the financial health of your business. Let Hawkins Help.

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