When to Consider a Merchant Cash Advance?

If you are running a business, you must be well aware of the fact that you can run out of cash at any point of time. Businesses can opt for business loan. However, in order to get approved, it takes some time. However, if businesses need some urgent capital, they can go for other financing option like merchant cash advance (MCA) or business cash advance.

business cash advance

Merchant Cash Advance

MCA can be considered as a kind of an advance that is given against the future credit card sales receivable.

business cash advance

MCA – Best Solution

A business might need some extra cash in order to purchase some things for their inventory. Insufficient fund can cause disturbance within the business operation. And when a business is not able to operate smoothly, pressure starts to mount up.

Taking up business loan is ideal but it comes with a lot of obligations, such as submitting collateral. However, a business cash advance, also known as MCA doesn’t require any such terms. Moreover, the loan gets approved and money gets transferred quickly.

 

How the Merchant Cash Advance Works?

With numerous businesses opting for MCA, it is very crucial to know how the merchant cash advance works. Once one is able to understand MCA, one can come to know if it would be suitable for their business.

When a business opts for MCA, they receive a lump sum of money ranging from $2500 to $250,000 of capital. The business cash advance amount gets transferred within few hours to days. The amount is provided by the online financing companies. Although the process might seem to be a simple one, it is not like that. The catch comes with the repayment issue.

The borrower needs to sign an agreement with the merchant cash provider. The provider checks out whether the borrower is having a good credit card sales history or not. However, MCA is one of the expensive financing options available in the market.

Although, the application process for the business cash advance is very simple; it comes with certain terms and conditions. For instance, businesses need to pay a certain percentage of their future credit card sales to the MCA provider. As soon as one starts to get the money, the business needs to repay the amount. Even though the time period is not fixed; still, the percentage of the daily credit card transaction that needs to be paid is fixed.

Advantage and Disadvantage:

The biggest advantages of MCA are:

  • Easy approval process and don’t need a lot of paperwork.

  • Credit score doesn’t bother the MCA providers very much.

  • Business cash advance don’t require year of proven profitability in order to qualify for the loan.

The disadvantage of MCA is that business would be paying the amount of their credit card sales on daily basis. Hence, cash flow will be interrupted. The amount might vary day to day as it will depend on the amount of money earned. Lastly, the whole amount is paid back, the withholding rate remains same.

Businesses should go for MCA if they don’t have any other financing options. They should only go for this loan if they can survive with limited cash flow during the repayment period.

Outsourced Bookkeeping Firms Can Help with Better Tax Preparation

Bookkeeping is one of the most crucial functions of any business organization. The main job of bookkeeping is to keep a record of everyday transactions. Usually, the bookkeeping task involves the task of tracking the financial operations and other operations like payroll, tax preparations, and internal audit and so on. While these tasks can be easily performed by the in-house staff, however, it is better to hand over these tasks to the experts of an outsourced bookkeeping company.

Well, one might think why one should hire an outsourcing company for the task of tax preparation or making financial reports? Everyone wants to file their tax on time. Therefore, businesses need to update their financial statements daily. The financial statements would help in preparing the income tax statements. However, the competition, along with the work pressure often forces businesses not to devote enough time on making financial reports. Often the reports are inadequate.

Thereby, businesses often fail to make timely payment of tax and faces penalties. Outsourcing the task of financial operations to outsourced bookkeeping company can help businesses with proper record keeping, timely tax payment and avoiding penalties. Visit Cassim Auzam for more info.

outsourced bookkeeping

Why Should One Take the Help of Experts For Tax Preparation?

It is a known fact that tax preparations and accounting takes a lot of time and often reduces their work efficiency. Everyone wants to make timely payment of tax and that too before the due date. In fact, properly tax filing can help businesses to stay relieved. It is seen that often businesses, don’t have enough time, for evaluating their income and payable tax amount. By outsourcing the task of tax filing and preparation to an outsourced bookkeeping company, businesses can stay assured of the fact that tax filing would be done properly. The firms have with them a team of experts who will evaluate the total annual income and will file the taxes accordingly.

Furthermore, they will ensure the business organization gets a rebate in taxes through various tax reduction methods. Basically, the outsourcing firms have with them a team of experts who keep themselves updated with the changing tax laws or tax provisions for the current financial year. They will implement the changed laws so that it can reduce the tax burden for the organization.outsourced bookkeeping service

Outsourced bookkeeping company has professionals who are specialized in handling various procedures like tax assessment to filing. They can help businesses by making complete tax documentation and reduces the complexity. The steps they take for making a financial statement is secure as they use latest software. The software provides them with efficient and secured tracking during each stage of return. In fact, for filing the tax return, the outsourcing firm will access the income of the organization. Added to that, they will assess your previous year’s financial statement so that they can calculate the variations.

Well, the tax return outsourced bookkeeping company tries to help clients with tax return related problems. They will ensure that your financial statements are up to date so that it can help an organization to remain in the good books of financial organizations. Hiring them can save you money and time. Added to that it can provide you with effective results like properly tax filing and avoiding penalties.