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MCA Uses: Top 11 Uses of MCAs in Business

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By Richard Wilson

Last Updated on

Estimated read time: 7 minutes

Whether you’re facing short-term cash flow challenges in your business or looking to seize new opportunities, Merchant Cash Advances (MCAs) can be used as your go-to financing option. 

This article zeroes in on the top 11 ways you can use an MCA to move your business forward, from stocking up on inventory to capitalizing on growth opportunities.

What Are MCAs Most Commonly Used For?

MCAs are typically used to cover cash flow gaps, fund various business activities and purchases, and for increasing working capital. But MCAs can generally be used for any purpose as long as the funds are used in your business.

The table below highlights the 11 most common uses of MCAs:

Used forDescription
01. Purchase InventoryUse the advance to purchase more inventory to cope with demand.
02. Working Capital FinancingUse the advance to help fund business operations.
03. Equipment PurchasesUse the advance to buy business tools and machinery.
04. Cash Flow ManagementUse the advance to manage gaps in cash flow.
05. Unforeseen ExpensesUse the advance to handle emergency expenses that pop up.
06. Renovation and RepairsUse the advance to repair or renovate your commercial space.
07. Expand WorkforceUse the advance to help expand your workforce.
08. Marketing CampaignsUse the advance to promote your business more.
09. Technology UpgradesUse the advance to invest in new tech and technology upgrades.
10. Cover Seasonal ExpensesUse the advance to cover expenses due to seasonality.
11. Fund Business GrowthUse the advance to take advantage of business opportunities.
Top 11 Uses of MCAs in Business
Green background with an illustration of a forklift, plant, and boxes

Usage 1: Purchasing Inventory

When you’re running low on stock or see a surge in demand, an MCA can be a lifesaver. Because you can get the MCA really fast within 1-3 days, the advance can be used to quickly replenish your inventory, ensuring you don’t miss out on potential sales.

Usage 2: Working Capital

When you need extra capital to keep your business running smoothly, traditional banks often shy away from lending for working capital. However, MCA providers allow you to use the advance specifically for working capital needs, enabling you to cover day-to-day operations like paying utility bills, settling invoices, or even meeting payroll.

Usage 3: Purchasing Equipment

If you need funds to purchase new business equipment but can’t meet minimum financing requirements like a credit score or other prerequisites, using an MCA to tap into future capital allows you to get that crucial equipment necessary for your business to operate or grow. MCA providers let you use MCA’s to buy any equipment or machinery for your business without any restrictions, as long as it’s meant for business use.

Usage 4: Cashflow Relief

Cash flow can fluctuate suddenly in your business, and when a sudden gap occurs you usually require access to capital fast to fix the problem. With an MCA, you can typically get funds within 1-3 days to address the gap really quickly. It’s one of the fastest ways to get capital.

Usage 5: Unforeseen Expenses

Unforeseen emergencies like equipment breakdowns or unexpected tax bills can happen in every business. If your business experiences a large unforeseen business expense, MCA Providers will allow you to use an MCA to address these unexpected costs. Traditional lenders are often reluctant to lend for these types of expenses, making MCAs a practical choice for handling unforeseen business challenges.

Usage 6: Repairs and Renovations

Perhaps your commercial space requires a facelift to attract customers or needs urgent repairs. An MCA can be used to finance these improvements quickly, even if you don’t own the commercial space.

Usage 7: Hire Employees

If you are looking to attract and hire new employees, you can use an MCA to cover hiring costs like advertising for positions, training new staff, or even using the funds to increase salary to attract top talent.

Usage 8: Marketing Strategies

Without a lot of capital to fund marketing campaigns for quick scaling and increased sales, you usually have to wait for sales to come in and then reinvest a portion back into new campaigns. You can use the funds from an MCA to market your products or services more aggressively.

Usage 9: New Technology

Staying competitive or scaling your business often means keeping up-to-date with the latest technology or investing in new tech. You can use an MCA to invest in new software, systems, or other tech upgrades to help streamline your business operations and improve customer service.

Usage 10: Cover Seasonal Revenue Fluctuations

Many businesses are seasonal, experiencing high sales during some periods and slower sales during others. If your business is seasonal, you can use an MCA to cover expenses in the slower periods or use the funds during the busy periods.

Usage 11: Fund Business Growth

When a good business opportunity comes your way, such as the chance to enter a new market, launch a product, or acquire a competitor, you don’t want to let it slip through your fingers because of a lack of funding. You can use an MCA to seize these types of business growth opportunities, regardless of whether the MCA provider deems them good or bad.

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The Bottom Line

You can use an MCA for a wide range of purposes. When you apply for an MCA, MCA providers will ask what you plan to use the funds for. The primary criteria for approving an MCA is the volume of credit card sales transactions your business generates, not how you plan to use the funds.  So even if the specific reason you need an MCA doesn’t appear on the 11 uses above as long as this is for a business endeavor it’s most likely acceptable to most MCA providers.

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