As a result, the flower shop was at its credit ceiling with the supplier and could not order more flowers to stock the shelves. Phil was facing a cash crunch he’d never seen in his 10 years in business.

 

The timing couldn’t be worse, as the supply chain crisis after Covid had already slowed down the flower deliveries. Instead of losing any more sleep over it, Phil jumped into action.  He had heard about a merchant cash advance and knew there was no faster access to capital. Not only that, but it would be simple to qualify for. Phil just needed to provide his flower shop’s bank statements for the last several months. Plus, unlike a bank loan, a cash advance didn’t require him to put up his residential home as collateral.

 

With approximately $60,000 in monthly revenue, Phil sought $45,000 in funding. Once approved, he could have the funds in his business checking account within one day. In exchange for the business revenue advance, the funding company would be withdrawing a small percentage of Phil’s weekly credit card sales.

 

The best part was that repayment is based on a percentage of sales and would ebb and flow alongside the ringing cash register. So, the funding company would take a lesser amount on a slow week. And when times are good, they’ll wind up taking more, which will ultimately help Phil repay the business revenue advance quicker. This was a win/win for Phil and his flower shop and meant that he would still be able to keep the lights on and pay his staff throughout the repayment period of 18 months.

Unlike small business loans, merchant cash advance companies are not picky with how business owners use the funds. As a result of this flexibility, Phil decided to get creative. Since he had such a beautiful flower shop that never got used in the evenings, he decided to spruce it up further and rent it out as an event venue on Friday and Saturday nights. After purchasing some tables and chairs and a portable dance floor, Phil was booking events in no time. While the supply problem caused him some short-term pain, in the long run, he was able to turn things around thanks to some out-of-the-box thinking and the funding he received from the merchant cash advance.

What’s New