Marginalizing small business with a credit score ranging from 300 to 499 has been the trend for many decades. The report by US’s Jessie Hagen shows that approximately 82% of the small businesses fail to manage the cash flow, and eventually, it leads to the bad credit score. So, if these businesses have to apply for a business loan, where or whom should they turn to? Looking at the increasing number, a wide range of alternative lenders is offering online cash advances for small businesses with a bad credit score. A Cash Advance is fast access to the money, especially if your vendor is refusing to pay the cash because you have not made the previous ones. Or when you run out of all the savings, then a cash advance can lend a helping hand, financially. Sometimes, lenders refer to the cash advance as a merchant cash advance or business cash advance.

Before we move on to the top online cash advances, let’s explore what is a cash advance, and the pros and cons of the cash advance.

What is a Cash Advance?

Technically, not a typical loan, an online cash advance is X amount offered to the borrower and in return, the lender takes a considerable amount of money from your daily future credit card sales. The lender has control over your merchant account and business checking account. So, defaulting on the payment is not an option.

Pros of a Cash Advance

An online cash advance comes with a lot of benefits, look at the following benefits:

  1. Through alternative lender & traditional lender to a credit card company, you can apply for an online cash advance from anywhere.
  2. We know that hardships of running a small business without ample cash. Depending on your potential lender, a cash advance offers fast access to money.
  3. The lender of a cash advance has to restriction on the use of money. By using the funds to purchase a new machine to purchase land for business expansion. The borrower has the complete autonomy to use the money as necessary.

Cons of Cash Advance

Although, the pros of a cash advance are convincing, but don’t make a final decision without looking at the cons.

  1. As cash advances have factor fees other than the standard APR and interest rates, so before you say ‘yes’ to the lender, you must calculate the total cost of the cash advance.
  2. Another important step is to find the repute of the lender. Security and confidentiality breach are two major issues so check the repute of the lender.

Best Online Cash Advance Options

Starting with ourselves, let’s examine the best 7 online cash advance companies.

  1. Merchant Advisors

Merchant Advisors’ Merchant Cash Advance offers a cash advance up to $500,000. Instead of the interest rate, a cash advance comes with a factor fee. The factor fee is calculated by dividing the financing cost by the total loan amount. Unlike the interest rate, the factoring fee is only calculated once. Lenders approve cash advance in just 24 hours. The factor fee or factor rate is 1.15 – 1.20.

As this is a remarkable funding option for the business owners with bad credit, so there is no credit score limit. Businesses with a credit score of 500 are getting the same treatment as businesses with a credit score of 700. The eligibility criteria are relaxed:

  • 6 months old businesses can easily qualify.
  • The qualifying business must accept Visa and MasterCard.
  • A credit card statement of at least four months

So, receive cash by giving up or offering a small bit of your future credit card sales carried through Visa or MasterCard.

  1. Fundera

Fundera offers cash advance or a merchant cash advance at an affordable rate. You can fill their online application instantly. In addition to this, just like Merchant Advisors, Fundera does not have a ‘no bad credit’ policy.

Cash Advance Amount: $2,500 – $250,000

Repayment terms: Daily payments via the merchant account

Factor Fee: 1.14 – 1.18

Availability: 24 hours

Fundera’s ideal candidate has an annual revenue of over $180,000, a credit score of 550, and running a 2 years old business. If you are picking Fundera as your cash advance lender you must have a driver’s license, credit card processing statements, bank statements and business tax return documents. Check your eligibility and apply right away!

  1. National Funding

Third, on our list, National Funding provides merchant cash advance for small business owners who despise the long approval process, meticulous and lengthy applications, and lower approval rate. The national funding deposits the cash advance into the borrower’s account. With no collateral policy, transparent funding, and no hidden fees this is an ideal funding option for business managers who are facing financial challenges.

Cash Advance Amount: $250,000

Availability: 24 hours

National Funding’s ideal candidate for a merchant cash advance must be running a year old business and must support the daily transactions of at least $3,000. As you don’t have to write any check or any offer any invoices, so it is a fair deal with reasonable repayment terms.

  1. OnDeck

Moving on, we have OnDeck on the list. OnDeck evaluates the borrower by looking at the credit card receipts of the borrowers rather than credit score report as it is in the case of traditional term loans. If you are consistent with your credit card payments, you can get the cash advance. Be mindful that a cash advance is open for business owners with a bad credit score, so it is an expensive funding option.

Cash Advance Amount: $5,000 to $500,000

Availability: 24 hours

OnDeck is a reputable lending platform; it has offered more than ten billion dollars to multiple small businesses. If you turn out to be an ideal borrower, OnDeck will share your financial performance with the credit bureaus.

  1. Headway Capital

Headway Capital also offers lump-sum of cash in exchange for 10% to 20% of future credit card sales. The repayment term is relaxed and shorter than the standard term loan. All you have to do is follow three simple steps: Fill an online application and apply online, get the approved cash advance and repay by sacrificing a bit of future revenue.

Cash Advance Amount: $100,000

Repayment: Daily

For bad credit businesses, this is a dream funding option. The more the transaction, the easier and faster is it to pay the loan.

  1. Kabbage

Next on our list is Kabbage, this lending company is determined to offer flexible funds by a simple process and transparent terms. For a merchant cash advance, Kabbage is offering instant working capital in exchange for future income. Instead of charging factor fees like the rest of the cash advance companies, Kabbage charges monthly fees.

Cash Advance Amount: $250,000

Monthly Fee: 1.25% and 10%

Kabbage’s repayment terms are different than the other lenders. Decide after assessing every factor.

  1. Lendio

One of the primary goals of Lendio is to provide fast funding to a business owner with a bad credit score. If you want fast access to the cash advance, then Lendio must be on your list. This lending company is familiar with the hectic routine of a small business owner, so all it asks is for the 3-4 months’ bank statements.

Cash Advance Amount: $5,000 – $200,000

Repayment Term: Up to 2 years

Availability: 24 hours

If you are confused about the decision, then check the qualification criteria on the official website of the website. Know that checking eligibility won’t hurt your credit score.

  1. Bfs Capital

Bfs Capital is offering a cash advance to small businesses with a bad credit score at a fair rate and easy repayment terms. The borrower can get the instant quote in just 24 hours, access funds in a couple of days, and a small percentage of future credit card sales go to the lender.

Cash Advance Amount: $5,000 to $500,000

Availability: 24 hours

An ideal candidate for the bfs capital’s cash advance runs a business for 9 months. In addition to this, a monthly $4,000 transaction is a must!

Having all the best online cash advance companies in front, you must choose your lending company wisely. Furthermore, if you think you won’t be able to make the repayments due to inconsistent cash flow, you must apply for a cash advance when you are ready. Always remember to read the contract carefully and make sure you agree with all the terms and conditions mentioned in the contract. If you think the lender is offering you unsatisfactory terms, contact your lender, and negotiate the deal.

Lastly, if you think Merchant Cash Advance from Merchant Advisors can help you get rid of the financial glitches, head over to the website and apply right away! To stay up to date, follow us on Twitter (@Onlinecheck) and Facebook (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.

Small Business Financing News │ Merchant Advisors | blog
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MichaelGavin
Merchant Advisors
Merchant Advisors
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