Why Seasonal Businesses Prefer Merchant Cash Advances over Bank Loans

Most people think of December as the big sales rush for seasonal businesses. However, for the past few years, many more businesses are experiencing seasonal rushes for springtime as well. In order to stock up on inventory and maximize sales, seasonal businesses use merchant cash advances (MCAs) instead of traditional bank loans.

Merchant Cash Advances Are Efficient

Seasonal businesses do not have time to wait on the bureaucracy of traditional lending channels. A loan can get sent between departments and even entire bank branches before a decision is made. Yet even before the application, businesses have to meet the prohibitively high requirements of the lending institution. By their very definition, seasonal businesses only operate for a portion of the year, so the financials often do not meet the requirements for a traditional loan. By contrast, merchant cash advances can be arranged quickly and efficiently because they are not dependent on arbitrary loan board decisions or red tape.


Loans require payments, regardless of revenue. If sales are low and a business cannot make a payment on the balance owed, then the danger of defaulting becomes a reality. Merchant cash advances offer the flexibility that seasonal businesses demand. Instead of rigid payments, merchant cash advances are repaid from a small percentage of sales. This means seasonal businesses can continue operations without experiencing a strain on cash flow due to a scheduled payment. Additionally, there are no prepayment penalties. If a seasonal business experiences very high sales, the balance on the cash advance is paid off faster without triggering any penalties or prohibitive fees.

No Debt on the Books

MCAs are an advance of working capital which seasonal businesses can use for everything from stocking up on inventory to hiring temporary workers, promotional campaigns, and more. The advance in capital means there is no debt placed on the books. This allows seasonal businesses to make the most out of their sales, focus on operations, and not worry about the debt that would accompany a traditional loan. Because of this, seasonal businesses get to preserve their credit ratings in case they want to expand operations, open a new location, or simply prepare for next year’s rush.

Approved Business Lending provides merchant cash advances as an alternative to the restrictions of traditional loans. Whether you need extra working capital to finish out 2018 or you are looking ahead to next year, we can help. Contact our offices to learn more about our merchant cash advance program for seasonal businesses.


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