5 Strategic Benefits of a Merchant Cash Advance Loan in India

A Merchant Cash Advance Loan in India clearly offers strategically powerful benefits. Before we even get to those benefits, it is imperative to understand what exactly these Merchant Cash Advance Loans are.

In very simple terms, any running business which has revenue accruing regularly is also in constant need of working capital to keep the business afloat and in good shape. All too often the revenue accrual is either slow or unpredictable, with funds often taking time to be credited to the business account. This is in spite of an entire barrage of expenses that the business needs to incur on an ongoing basis.

It is requirements like these which are fulfilled easily by a Merchant Cash Advance Loan in India. Armed with this broad perspective, we can straightaway dive into the invaluable benefits that come with a Merchant Cash Advance Loan.

Simplistic Requirements

Most businesses would be loathed to avail of a Merchant Cash Advance Loan in India, had it not been the relatively simplistic requirements/eligibility criteria.

While not being exhaustive, some of the typical requirements for availing a Merchant Cash Advance Loan in India include:

  • Minimum Turnover Amount, often in the range of Rs. 20 Lakhs per annum
  • Minimum Card Payment Value of at least Rs. 1 Lakh a month
  • The business has to be Operational for at least one year, with card payments being accepted for at least six months

For the above-listed criteria, we have taken the referral of SME credit major, Capital Float.

Bear in mind though that most other lending companies/platforms would have similar eligibility criteria as listed above.

High Financing

A big advantage of Merchant Cash Advances in India is that the extent of financing that can be availed is quite high. For instance, in many cases, it can be as high as 200% or twice the amount that is settled on card payments each month.

To put that in perspective, a business with 1 Lakh Rupees in monthly card settlements can avail a merchant cash advance of 2 Lakh Rupees while another such business with say 5 Lakh Rupees in monthly card settlements can look forward to availing merchant cash advances that are as much as 10 Lakh Rupees.

This clearly gives businesses enormous flexibility in the way they can function on a day-to-day basis.

Very Broad Loan Range

Yet another fascinating facet of Merchant Cash Loan Advances in India is the wide range of loans that can be availed. Starting from as little as 1 Lakh Rupees, businesses can go on to avail as much as 3 Crore Rupees in Merchant Cash Advances.

This is clearly a very wide range, which gives businesses the flexibility to avail a loan which is in line with their requirement. As long as eligibility criteria are being met – commensurate to the quantum of the loan being sought, such requests are likely to be fulfilled without any qualms.

Merchant Cash Advance Loan in India
Businesses receiving regular card payments especially benefit from availing a Merchant Cash Advance Loan in India. Image Courtesy – St Subscribe

Merchant Cash Advance Loan Tenures Tend to be Flexible

Yet another important advantage of Merchant Cash Advance Loans is that the tenure over which repayment is to be made tends to be flexible. So, for instance, if the business is in urgent needs of funds at a particular time – and as it prospers and the need for exterior sources of funds diminishes, it can very well pay off a substantial portion of the loan advance; perhaps even all of it if circumstances permit.

For this, players operating in this space have to be credited. They have all kept the interest of businesses above their own, ensuring that repayment terms are as flexible and comfortable for concerned businesses, as possible.

Personalisation

Finally, a big advantage of Merchant Cash Advance Loans is that lenders tend to have a personalised and connected relationship with their customers. They take an active interest in their interests, ensuring, for example, that additional funds are available to them, should they need them.

Conclusion

If you run a business that has frequent funds coming in, especially card payments, and at the same time, you need working capital to ensure that the entire setup continues to function smoothly, then availing a Merchant Cash Advance Loan in India would be just the right thing to do.