6. Merchant Cash Advances
There is usually repayment in the form of automatic transfers of cash from the revenue daily or weekly. This kind of finance had been attractive to small businesses that have a large inflow of cash daily, such as retail shop owners and restaurants.
Advantages
• Cash-in quick with little paperwork.
• Scale directly to income: slower months’ pay less.
Disadvantages
• Interest and fees are very expensive as it is debt.
• The amount repaid can be very cash-intensive to the declines if revenues dramatically decline.