Getting around on public transport seems to be becoming more and more difficult. With trains and tubes overcrowded and bus routes being reduced, more and more people are now choosing to use the taxi and private hire industry when it comes to making journeys.
Customers are also increasingly paying for their ride with a credit or debit card. As a taxi firm, this opens up the potential for you to use merchant cash advance.
Merchant Cash Advance is an innovative approach to raising funds based on your merchant’s account you use to accept card payments (your PDQ machine). It is repaid – along with fees – by a percentage of every card transaction your business makes.
The festive period is always a busy time for taxi and private hire firms, which makes it the ideal time to consider taking out a merchant cash advance. It’s the perfect time of year to make the most of every fare that goes through your PDQ machine.
Here we’ll explain more about what a merchant cash advance is, and the benefits it can bring to your taxi firm.
What is merchant cash advance?
Merchant cash advances are a method of business financing. They are a great way to get short-term capital for your taxi firm or private hire business.
Your lender will provide your business with a cash advance which is then repaid as a percentage of its customers’ card payments using a card terminal (PDQ machine). The beauty of this is that the advance is repaid in line with sales: your business only pays back the advance when it receives customer card payments, which helps to manage cash flow.
The benefits of merchant cash advance
Merchant cash advance allows you to access capital for your taxi firm quickly. As soon as the lender approves your application for a cash advance, you can access the cash. Decisions tend to be made quickly (within 24 hours), making this an ideal funding option for businesses who require capital quickly.
Another major benefit of a merchant cash advance is that your repayments are all based on revenue, and repayment is only made in line with sales, which is great for cash flow.
Why is merchant cash advance ideal for taxi firms?
A major benefit of a merchant cash advance is that your repayments are all based on revenue, and repayment is only made in line with sales.
Merchant cash advances are ideally suited to taxi firms now that a high proportion of customers choose to pay for their ride with their debit or credit card. The more sales you put through your card terminal, the faster you will repay your merchant cash advance.
Why the festive period is the perfect time of year to use merchant cash advance
Your merchant cash advance provider will deduct a daily or weekly percentage of debit and credit card sales until the amount is repaid in full; this amount tends to be around 10% – 15% of the sale. If you want to get your merchant cash advance paid off as quickly as possible, there’s no better time to start repaying it than in the run up to Christmas- your busiest time of the year.
Every time a sale goes through your PDQ machine you’ll be paying off your merchant cash advance in a way that doesn’t impact your cash flow. It makes sense to get your merchant cash in place before the busy festive period, as that’s when you will have more transactions being put through your PDQ machine, which means your cash advance will be paid off more quickly.
How can taxi firms apply for a merchant cash advance?
The easiest way to apply for a merchant cash advance is to contact a business finance broker such as PMD. PMD are experienced in securing this type of funding for taxi and private hire firms just like yours, and are always on hand to help and advise on the best funding options for you.
PMD has an unrivalled range of solutions, specialists, and access to over 150 lenders. We take the hard work out of securing merchant cash advance for your business, liaising with lenders on your behalf, leaving you free to focus on running your business.
If you own a taxi or private hire firm and are interested in securing a merchant cash advance in time for the run up to Christmas, get in touch today to see how PMD can help.