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Case Study: How a Small Business Transformed with a Merchant Cash Advance?

Business is a competitive landscape, no matter your industry or where you are located. Amid creating a functioning business, you may wonder how to secure additional funds to do the things that need to be done to grow. However, it is possible—with the right lender and a Merchant Cash Advance (MCA). Let’s look at the case of a dental office in Methuen, MA, as well as its transform with the assistance of the team at New Bridge Merchant Capital. By the end, you will know if a MCA is right for your business, too!


Key Takeaways


  • Merchant Cash Advances offer upfront cash in exchange for a percentage of future credit card sales.
  • MCA repayment is based on daily credit card transactions and a predetermined factor rate.
  • MCAs can be used for various purposes, including working capital, expansion, addressing seasonal needs, emergencies, and opportunistic investments.
  • A $105,000 MCA transformed a dental office, enabling marketing, equipment upgrades, and service expansion, leading to increased capacity and growth.
  • Businesses considering MCAs can explore options with New Bridge Merchant Capital, benefiting from a quick application process and no penalties for early repayment.


What is a Merchant Cash Advance?

A Merchant Cash Advance (MCA) is a form of financing where a business receives a lump sum of cash in exchange for a percentage of its future credit card sales. It’s a popular option for businesses that have consistent credit card sales but may struggle with traditional loan approval processes or have unpredictable cash flow.


Here’s how it typically works:


  • Advance Amount: The lender provides the business with a lump sum of cash upfront. This amount is typically determined based on the business’s average monthly credit card sales.
  • Repayment Structure: Instead of fixed monthly payments, the lender collects repayment by taking a percentage of the business’s daily credit card sales. This means that repayment fluctuates with the business’s sales volume.
  • Factor Rate: The lender charges a factor rate, which is a multiplier applied to the advance amount to determine the total repayment amount. This factor rate is typically between 1.1 to 1.5, depending on various factors such as the risk level of the business.
  • Repayment Period: The repayment period varies but is usually shorter than traditional loans, ranging from a few months to a year or more.

What Can You Do With a Merchant Cash Advance?

A MCA is relatively flexible with how you can use it. Here are some of the ways a business can utilize a Merchant Cash Advance:


  • Working Capital: Businesses often use MCAs to cover short-term expenses and maintain cash flow. Whether it’s purchasing inventory, covering payroll, or managing unexpected expenses, MCAs provide quick access to capital.
  • Expansion and Growth: MCAs can be used to invest in business expansion initiatives such as opening new locations, launching marketing campaigns, or upgrading equipment and technology.
  • Seasonal Needs: Businesses with seasonal fluctuations in revenue can use MCAs to bridge gaps during slower periods or ramp up operations during peak seasons.
  • Emergency Funds: In times of crisis or unforeseen circumstances, such as natural disasters or economic downturns, MCAs can serve as emergency funds to keep the business afloat.
  • Opportunistic Investments: Some businesses use MCAs to seize time-sensitive opportunities, such as purchasing inventory at a discounted rate, securing a lucrative business deal, or taking advantage of expansion opportunities.


Case Study: Client’s Background

Now that you know a bit more about Merchant Cash Advances, let’s discuss the case of a dentist office in Menthuen, MA. Although the dental office had established itself as a reputable office within the community and had a solid reputation, it was struggling to expand. Despite having an endless stream of patients, the dentist office could not secure enough funds to realize its full potential. Traditional lending institutions presented limited options, with stringent criteria and lengthy approval processes, leaving the dental office at a standstill in its pursuit of expansion.


Challenges Faced


  • Limited Financial Resources: The dental office lacked the necessary funds to invest in crucial areas such as equipment upgrades, service expansion, and staff recruitment.
  • Traditional Lending Constraints: Conventional banks and lenders imposed strict eligibility criteria and prolonged application timelines, hindering the practice’s ability to access timely financing solutions.


Acknowledging that they needed an alternative to traditional lending, the Menthuen dentist office started to search online for lenders, eventually coming across New Bridge Merchant Capital.


How a Merchant Cash Advance Aided the Client

Turning to New Bridge Merchant Capital was a decision that ultimately turned things around for the dentist office and made those challenges a thing of the past. How so? New Bridge Merchant Capital offers a a swift and efficient application process, ensuring expedited access to funds to meet urgent business needs. Furthermore, recognizing the diversity of small businesses, New Bridge Merchant Capital offers bespoke financing that meets the requirements of the business and enables clients to pursue their objectives confidentally. Additionally, New Bridge Merchant Capital evaluates applications based on business performance rather than solely relying on credit scores, offering opportunities to businesses with varying credit histories.


Empowered by New Bridge Merchant Capital’s tailored financial solution, the dental office secured a $105,000 loan that changed the path of the business. With the funds that the Menthuen dentist secured, they were able to market, upgrade equipment, and expand their services. Finally, the goals the business had set out to achieve were doable, and now they are able to operate at a much higher capacity.


Contact New Bridge Merchant Capital Today to Learn if an MCA is Right For You

The case of the Methuen dental office exemplifies the transformative potential of strategic financing with New Bridge Merchant Capital. By overcoming financial constraints and leveraging tailored funding solutions, businesses can unlock new opportunities for growth and success, propelling them towards a brighter future in the competitive business landscape.


If you think a Merchant Cash Advance is right for you, consider contacting New Bridge Merchant Capital today to see what we can do for your business. The application process is quick and easy. There are plenty of options available and no penalties for paying your loan off early. Contact us today at 844-228-0593 or by filling out the online form

Work With a Leading Commercial Lender

At NewBridge Capital Solutions, our loan products can help businesses of all sizes. With our exceptional customer service and reputable funding, we have become a trusted leader in the commercial finance industry. If you want to apply for a term loan that can provide working capital for your business, make sure to contact us.
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