How Auto Repair Businesses Can Benefit from a Cash Advance
How Your Auto Repair Business Can Benefit from a Merchant Cash Advance
April 25, 2018

How Your Auto Repair Business Can Benefit from a Merchant Cash Advance

As an auto repair business owner, it’s imperative that you have access to working capital so that you can invest in your business. Without it, you likely won’t be able to serve as many customers, and won’t have the necessary tools to fix their vehicles.

Luckily, there are many financing options available to auto businesses. One option that you may not know about is merchant cash advances.  The way that merchant cash advances work is simple. In exchange for a lump sum of money in the present, your business promises to remit a percentage of future credit card sales to the cash advance provider. Merchant cash advances have become popular due to their flexibility, as they work alongside the pace of your business’s sales.

In this post, we’ll explain how you can benefit from having a merchant cash advance for your auto repair business.

Fulfill Your Obligation at the Pace of Your Business’s Sales

With a traditional bank loan, your business will be expected to make monthly payments regardless of incoming revenue. If your business is generating less sales than you had hoped, repaying your business loan could become challenging.

With a merchant cash advance, the amount you remit your provider will be based on a percentage of how much revenue you’re generating at the time. As an auto business owner, this can be especially valuable if you experience seasonality, or simply have an unexpected slump in sales.

Upgrade Equipment Sooner than Otherwise Possible

Recent data suggests that the auto repair industry is more competitive than ever before. To compete, it’s important to invest in high-quality and reliable equipment. However, you may find yourself in a difficult situation in which you cannot afford new equipment until you’ve generated a certain amount of revenue.

With a merchant cash advance, your auto repair business will have access to a wider range of possible options. You’ll have additional financing available, and can upgrade or repair required equipment when the need arises, instead of having to wait for sales to increase.

Have Money for Payroll

As is the case in many types of businesses, the auto repair industry is heavily dependent on seasonal, economic, and weather-related trends. Unsurprisingly, most auto repair shops experience their highest volume of sales during winter.

Although your revenue streams likely come in waves, you may want to keep a consistent level of employees on-staff throughout the entire year, so that you’re s able to immediately serve customers when they inquire about repairs. A merchant cash advance can provide you with more capital during the lower points of the business cycle, and you’ll be able to pay your employees and take on more work.

Expand Your Business

As an auto business owner, it’s pivotal that you don’t stay complacent. Instead, you should always be brainstorming ways that you can grow your business. For instance, you could open new locations, create a franchise, or increase the amount of services that you offer, just to name a few examples. With your cash advance, you’ll have a lump sum that you can utilize to pursue your expansion plans.


As you will find with all short-term financing strategies, a merchant cash advance has both positive and negative qualities. Getting a lump-sum of cash today may be exactly what your auto repair business needs to succeed. However, you may be hesitant to surrender a future portion of credit sales. By understanding the specific qualities of a merchant cash advance, and considering how you can utilize the product, you can decide if this is the right option for your auto repair business.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Andrew Paniello
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Andrew is an experienced writer with a degree in Finance from the University of Colorado. His primary interests are investing, entrepreneurship, and economics.