Even though it is more expensive than other types of funding, merchant cash advance has seen steady growth as a small and mid-sized business financing option, particularly after financial institutions tightened their lending purse strings in response to the financial crisis. The Strawhecker Group estimates that merchant cash advance is now a $6 billion annual industry, up from about $4 billion just a few years ago, notes Jared Drieling, Business Intelligence Manager, with the Strawhecker Group.
“Merchant cash advance is growing at a strong clip,” says Driel- ing. “Small businesses that were either turned down by tradi- tional banks or found that the loan process was too lengthy are turning to cash advance.”