Merchant cash advances are proving to be valuable sources of alternative financing for all types of businesses throughout Canada. Of course, with so many different business types, the uses of each cash advance varies.
While some companies look to open new locations, others choose to renovate. Many businesses look towards advertising to increase profits while others require the extra capital to purchase new equipment.
Synergy Merchant Services has found that numerous clients are enjoying the benefits of our cash advance program because previous to participating in it, they were unable to afford the equipment necessary to sustain their businesses. Restaurants are especially known for needing to either repair or replace their ovens and refrigerators, for example.
Many restaurant owners across Canada have become used to leasing their equipment as paying for such large items outright is generally unmanageable. According to eLease.com, “currently 35% of all equipment is leased”.
There are, of course, advantages to leasing over buying as the process allows for smaller payments to be made over time. Business owners, therefore, can make use of their new equipment without having to part with a large sum of money right away.
Business owners who have made use of our cash advance program, on the other hand, are finding it an even more convenient method of affording new equipment. The advantages to using a merchant cash advance to buy these large, yet necessary items over leasing them are many.
When leasing equipment, standard monthly payments are expected regardless of how well the business is performing. In addition, leases are often inelgible for renewal in the middle of the term regardless of the needs of the business during that time.
With a cash advance, the payment amounts that go toward the repayment of the advance, are dependent on the credit and debit cards sales made by the business each month. This ensures that no payment is unaffordable. As well, renewals are offered halfway through the payback term. This is a benefit many of our clients have taken advantage of.
In addition, a business owner who is using his or her cash advance for the purchase of new equipment can make the purchase outright without having to worry about additional interest charges.
So while leasing may have once been a viable option for business owners, buying new equipment with the help of a cash advance is an even better way to go.