Small business owners thinking of expanding now have another reason to get a merchant cash advance.
According to the National Retail Federation, holiday sales are forecast to increase to 4.1 percent, or $616.9 billion. This represents a considerable rise from 2013’s 3.1 percent increase.
The NRF also pointed out that holiday sales have grown 2.9 percent on average over the past 10 years. 2014 would mark the first time since 2011 that holiday sales would increase more than 4 percent.
“Retailers could see a welcome boost in holiday shopping, giving some companies the shot in the arm they need after a volatile first half of the year and an uneventful summer,” NRF President and CEO Matthew Shay said in a recent media release. “While expectations for sales growth are upbeat, it goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions. The lagging economic recovery, though improving, is still top of mind for many Americans.”
This expected rise comes on the heels of similar news from Deloitte, which reported that total holiday sales are expected to reach between $981 and $986 billion from November to January – a 4 to 4.5 percent increase compared to 2013. The NRF’s more conservative estimate can be attributed to the fact that its forecast excludes auto, gas and restaurant sales, and only covers the time period between November and December.
“Income, wage and job growth are positive indicators heading into the holiday season,” Daniel Bachman, Deloitte’s senior U.S. economist, said in a press release. “Debt levels remain at historical lows, and stock market gains coupled with increasing home prices have a wealth effect on consumers, which may encourage increased spending compared with prior years.”
Keeping up with inventory, staff
In order to contend with increased holiday demand, there’s no doubt many small business owners will need to expand their inventories and hire more staff. The question many owners are asking themselves, however, is how they’re going to afford it.
With a merchant cash advance, small business owners can secure the money they need quickly without having to worry about taking on debt. National Funding will provide cash in exchange for a fixed dollar amount of future credit card sales. This means that at the end of every day, an automated process retrieves a small fixed percentage of daily credit card transactions until the advance is paid off.
In short, merchants only have to pay the advance back when they get paid.