The Apparel Industry Can Benefit from Merchant Cash Advances

At some point in time, any business could stand to benefit from some extra funding for their operations. Whether a large or small company, sales slumps can hit without warning. A massive order may wipe out your materials and inventory long before the invoicing schedule brings in the funds to replenish the stock. These things can happened frequently in the apparel industry, and small businesses can benefit from short-term financing called merchant cash advances (MCA).

What is an MCA?

A merchant cash advance will consider your credit card transactions and bank statements if you apply for funding. After negotiating the sum of money to receive, the MCA lender releases the funds to your company in one payment, which you are then free to use on whatever you need. Rather than sign a contract with term conditions of scheduled monthly repayment amounts for a length of time, the MCA lender will automatically deduct an agreed upon percentage of your credit card transactions as payment.

With this method, you aren’t locked into a monthly loan payment and drawing on cash reserves if your revenue slowed. The percentage remains the same whether you have a slow day at work or sales boost. There is a financing fee for the services, and lending rates with an MCA can be quite a bit higher than a traditional bank loan.

Who can use an MCA?

Anyone who operates within the apparel industry could rely on an merchant cash advance for some access to quick cash. Clothing store retailers, textile importers or wholesalers may be in need supplemental funding for marketing campaigns or inventory. Service providers such as customs brokers, law firms, logistical companies or testing facilities may need to hire temporary help or pay industry-related training fees or licensing costs. Suppliers and manufactures could use extra funds to purchase additional materials and stock their inventory. Fashion agencies can use the funds to develop strong advertising campaigns, recruit models or purchase new clothing lines.

Why is an MCA beneficial?

A merchant cash advance is one the few financing opportunities that is both simple to apply for and easiest to be approved. You receive your funds within one to two business days, which can really benefit the apparel industry where orders can blossom overnight. You are also able to pay back the sum in a  manageable fashion, no pun intended.

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