Australia is a nation of small businesses. These small businesses, along with the role of a merchant cash advance play a vital role, and as the economy evolves they will only grow in importance. There are an estimated 2.2 million (and growing) small businesses in Australia. These businesses produce approximately 33% of Australia’s gross domestic product and employ 4.7 million people, or roughly 44% of Australia’s working population. No matter how small the business, it is an important contributor to Australia’s national economy.
Quite simply, small businesses are the backbone of Australia. Yet despite their immense importance, many small businesses struggle to secure loans. Banks have long shunned small businesses due to their small size and the perceived high risks involved in lending to them, while finding investors can be difficult for these small businesses. Meanwhile, relying on friends and family for financial assistance and funds raised in their personal capacity ie. Credit cards and overdrafts.
The Merchant Cash Advance (MCA) industry has emerged as a popular alternative to traditional bank loans. Now with the small business sector set to enjoy unprecedented prosperity in 2018, cash advances will play an increasingly vital role in helping small businesses secure funding. Let’s explore the small business forecast that Australia and the rest of the world could enjoy in 2018, and consider how MCA’s can tap into this potential growth.
Many small businesses struggle to secure loans from traditional banks. In fact, 16% of small businesses never even bother applying for loans out of fear of rejection. Meanwhile, 70% of those approved for funding fail to secure the full amount of funding they need.
If you have been rejected for a loan, or are having trouble finding funding, you are not alone. Experts estimate that there is between $80 and $120 billion dollars in unmet demand for business funding.
When it comes to securing a merchant cash advance, businesses are far more likely to be approved. Why? First, a cash advance is not a loan. Instead, a business will sell a portion of its future sales, usually credit card sales to a merchant cash advance firm. Repayment is collected back as a % of future sales.
Since “repayment” is based on sales, this also means that businesses don’t have to struggle with inflexible loan terms. Further, merchant cash advances can often be extended to newer businesses, or business owners with an historic bad credit rating. Banks frequently reject these applications.
OPPORTUNITIES FOR SMALL BUSINESSES WILL BE DIVERSE
Experts in the market have identified account services, IT support, business consulting, architect firms, and speciality grocery stores as the top five industries for entrepreneurs to start their own small businesses. It has been identified that dentists, legal services, and health care offices are among the most profitable small businesses.
Dig around a bit more on the web, or better yet, take a ride around town, and you’ll find literally limitless opportunities. Mom and pop coffee shops, artisan restaurants, hair and beauty services, and other small business industries are ripe with opportunity. And while big name brands like Starbucks once held strangleholds on markets, many consumers now prefer to shop local, and authenticity is
currently a big selling point.
Many of these businesses are going to require funds both to start and to expand. Speciality grocery stores are becoming very popular in many cities but building inventory, expanding storefronts, and launching advertising campaigns is not cheap. The same is true for health care offices.
Banks are often hesitant to work with these small businesses. Many of them are young, or even startups, and thus aren’t eligible for bank loans. Meanwhile, businesses face the risk of being pushed out of the market by competition if they are unable to secure funding.
Merchant cash advance firms can provide businesses with the funds they need to expand. Since a cash advance is not a loan MCA’s can be extended to many companies that would not qualify for loans. This makes cash advances perfect for younger companies, business owners with other bad credit companies working in higher risk industries, and numerous other companies that have trouble qualifying for traditional loans.
CONCLUSION: TIME TO EXPAND IS NOW & CASH ADVANCES CAN HELP
The economy is expanding, and 2018 could be a big year for small businesses. Business investment, consumer spending, consumer confidence, across the board and numerous other indicators point to expansion. While the future is always uncertain, savvy small business owners are already expanding and tapping into rising demand
WHY A MERCHANT CASH ADVANCE IS PERFECT FOR SMALL BUSINESSES
- Up to $500,000
- Flexible repayments via a ariable debit order, or split processing via your EFTPOS terminal
- Funding usually received between 24 and 48 hours
GROWTH OF THE MCA INDUSTRY
The Merchant Cash Advance sector is already a large and growing industry. When you apply for a merchant cash advance you’ll be tapping into a multi-billion dollar industry that has already helped countless businesses expand and grow.
- The Merchant Cash Advance industry was founded in 1998, and by 2015 had grown into a $10.7 billion dollar industry. It was projected to hit $15.3 billion dollars by 2017.
- As the economy continues to expand, demand for business funding will only continue to rise.
- Merchant Cash Advance operators are in prime position to tap into surging small business industry.
Speak with a lending specialist today about funding the growth of your business.