Merchant Cash Advances vs. Real Estate

July 16, 2023

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Merchant Cash Advances Vs. Real Estate

Introduction: Unveiling the Shift in Alternative Investments

The traditional investment landscape is changing. With the death of the 60/40 portfolio, more investors than ever before are exploring unconventional assets to grow their wealth and protect their futures.

Two prominent options in the alternative assets field are Merchant Cash Advances vs. real estate. But which offers the better investment opportunity? Let’s dive in.

The Fall of Real Estate: An Aftermath of the Pandemic

The commercial real estate market has taken a significant hit since the onset of the pandemic. According to a report from Deloitte, commercial property returns have fallen by 20% over the last four years, highlighting the market’s struggle to recover.

Data from the 2023 study showed that of 450 Chief Financial Officers, a full 48% expected commercial real estate returns to fall even further in the coming months and years as remote work has become the firm new normal.

Credit card and coin on violet background Merchant Cash Advances vs. Real Estate
Why Merchant Cash Advances Might Outshine Real Estate in Today’s Investment Landscape. Photo by Monstera.

Unlocking the Potential of Merchant Cash Advances

Meanwhile, MCAs have been gaining traction. MCAs are advances provided to businesses in exchange for a percentage of their future sales. They offer high potential returns, with the MCA market expected to reach $1791.21 million By 2027.

MCA vs. Real Estate: The Battle of Liquidity

One of the most compelling advantages of MCAs is their liquidity. Unlike real estate, which can take months, and in the case of commercial property, even years to sell, MCAs can be cashed out in a relatively short time, offering you faster access to your returns.

We offer both a 12-month and a 24-month note, as well as a versatile self-directed model for those of you who prefer a hands-on approach.

Why Short-term Profits Matter: Unraveling the Speed of Returns

Short-term profits are another significant advantage of MCAs. They typically start providing returns within days, unlike real estate investments. This can be crucial if you need quicker financial returns.

Our MCA notes, for example, begin issuing returns into your account from day one, giving you a unique opportunity to either draw an immediate income or begin reinvesting your returns to capitalize on compound velocity.

Recurring Income: The MCA Advantage

MCAs offer a steady stream of income, as returns are based on daily or weekly business sales. In contrast, real estate income can fluctuate depending on occupancy rates and rent collection issues.

Illustration of revenue in coins banknotes and credit card Merchant Cash Advances vs. Real Estate
From Bricks to Business – MCAs as superior revenue generators. Photo by Monstera.

Navigating Risk: A Comparative Analysis

Of course, as with all investments, MCAs do carry risk and you may not get back what you put in.

Having said that, MCAs can offer a level of predictability that real estate may not. The steady income flow from MCAs, tied to daily business sales, can help reduce your investment risk, especially when compared to the unstable post-pandemic real estate market.

The uncertainty of void periods in real estate can be detrimental to your returns, especially when it comes to high-value commercial properties that are becoming more and more difficult to sell or find tenants for.

On the other hand, MCAs require thorough due diligence, ensuring that businesses have a strong history and pass strict credit checks before they are deemed eligible. This rigorous selection process bolsters the security of your investment.

Furthermore, the presence of recovery agents in the MCA sector acts as an additional safety net, with their specific role being to recover unpaid advances. This reduces the risk of your investment being compromised, making MCAs a more reliable option than many people think.

Why MCAs could be Your Ideal Investment Choice

Let’s summarize why MCAs might be the superior choice:

  • Higher liquidity
  • Short-term return potential
  • Recurring income generation
  • Rigorous due diligence on eligibility
Illustration of modern workplace and heap of money Merchant Cash Advances vs. Real Estate
Investors are Increasingly Choosing MCAs over Real Estate. Photo by Monstera.

Conclusion: Making the Right Investment Choice

So, should you invest in MCAs or real estate?

Well, in an increasingly unpredictable and fast-moving market, we think that Merchant Cash Advances present a robust alternative to traditional real estate investments.

The resilience and adaptability they have demonstrated, coupled with the shorter-term commitment and higher income potential, can offer a solid investment strategy that balances risks and returns effectively.

With real estate, particularly commercial property, exhibiting significant vulnerabilities, it’s not surprising that MCAs are growing in popularity as a first choice for alternative asset allocation.

Whether you’re a novice or a seasoned investor, the opportunity to diversify and fortify your portfolio with MCAs should not be overlooked. Remember, the success of an investment strategy lies not just in its returns, but also in its capacity to navigate and thrive in an ever-evolving economic landscape.

In this context, MCAs offer a promising prospect for those willing to step beyond the traditional confines of real estate investment.

You can start your MCA investment journey here.

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