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United Capital Source specializes in working with auto repair shops and car dealerships, largely because we are capable of solving multiple types of problems with multiple types of small business loans.
Both businesses are excellent candidates for a merchant cash advance. This working capital loan provides a lump sum in exchange for a fixed percentage of future credit and debit card sales. It’s safe to say that most customers of auto shops and dealerships do not pay with cash. But perhaps the biggest benefit of merchant cash advance is not having to pay off the brunt of the debt until revenue from credit and debit card transactions increases.
So, if an auto repair shop was approached for a huge project, the merchant cash advance could be used to order the parts and/or cover regular business expenses until compensation comes in. The same concept applies to buying bulk inventory for a discount when business is slow and then paying off the debt when business picks up. A merchant cash advance can also be used to quickly solve sudden problems, like a tow truck in need of new transmission.
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Another type of working capital loan for auto repair shops is accounts receivable factoring. The business lender purchases unpaid invoices for a discounted price and then takes responsibility for collecting the money that is owed. This is very advantageous for shops that must wait weeks or even months to be paid by insurance companies.
Car dealerships can utilize merchant cash advances to cover expenses and keep prices low when revenue temporarily drops or more buyers are trading in their cars. Their many sales promotions require substantial advertising, and merchant advances allow dealerships to continuously market themselves on a national level amid fluctuating revenue. Having more money to spend during slow periods ultimately increases the likelihood of a strong performance during a busy period. Apply now to see how much you qualify for!