What is Business Cash Advance?
Business cash advance is a financing program that provides quick funding to businesses. To make to more simple, a business gets upfront cash in exchange for its future sales. As the name refers, business cash advances are not loans – actually they are a portion of a business’ future sales.
In the United States, cash advances are not constrained by state usury laws, which restrict lenders from charging immoderate interest. Banking institutions that are not lending to businesses, cash advance for business is a reasonable financing source.
These cash advances usually cost greater than conventional loans offered by the banks. However, the cash advances are processed quickly as compared to an average business loan, making it even more ideal to business owners. The cash advance repayment also can be based on the sales volume of a business, which gives the owner more flexibility in managing cash flow and running business effectively.
What Is Required To Apply For A Merchant Cash Advance?
Due to the fact the terms of a conventional loan depend on the ability of an owner to pay back the borrowed amount, therefore the application and approvals of traditional loans are typically prolonged processes.
However, a business cash advance does not require the same exhaustive and prolonged application process, and you’re normally requested for less information than a lender requires. This makes the whole approval process easy and speedy—almost in 24 to 48 hours, compared with the conventional 30 to 60 day duration that one could wait for approval for an average business loan.
How It Works?
With this business funding program, you get a cash advance, normally authorized and funded in a day or two with minimum paperwork. In turn, you agree to pay back the advance by allowing the lender to take a part of your credit card sales daily until the full borrowed amount has been repaid.
While a business cash advance can undoubtedly be a quick funding source, it can additionally be pretty expensive. Fees can range from 15-80 % APR of the financed amount. But, the lenders consider their fees as a factor rate that can range from 1.14 to 1.48. The amount you borrowed under this program is multiplied by that factor rate to determine the amount you pay back. You’ll pay this back by giving the lender a set percent of your credit card sales daily until the borrowed amount has been settled, which means you pay back a lower amount of cash during slower times. General repayment terms are 10-12 months.
If you are looking for a quick funding option and don’t qualify for financing at bank, business cash advances could be an option. Business cash advances are a terrific financing solution if you have little or no collateral, limited credit history, or a bad credit score.
In case you get a large portion of your business revenues through credit cards (for instance, restaurants and retail stores), you are the ideal applicant for business cash advance. This is a short-term loan to help you with the cash flow of your business, pay debts, purchase inventory meet unexpected expenses, and much more.
Advantages Of Getting A Cash Advance
Online cash advances are good if you are in a financial difficulty, or some out of the blue expenses come up that require quick cash. Once approved, it can be transferred to your business bank account in as little as 24 hours or sometimes on same day. Due to the fact that cash advances do not require you to provide any credit reports or guarantees. That means, businesses with bad credit issues can also apply for quick funding through this financing program.
Business Cash Advance Vs Traditional Small Business Loans
- Business that has good credit and has been in industry for over a year, banks may consider them as a high-risk. Many lenders will not offer funding by any means, while who do tend to be very selective.
- Due to the fact that business is quick-paced and frequently changing, business owners often need cash for renovation, marketing and expansion of their business. Traditional funding takes so much time to qualify for and may not be approved in time, while with business cash advance program, the approval is in just 24 hours.
- Small business loan requires fixed repayment, but the business cash advance is based totally on credit score card revenue… so during slow season, it helps you to pay less.
- Even when you have been declined for a small business loan, you may still be able to qualify for a business cash advance.
- There are no restrictions on the use of cash advance. It is completely on you how you wish to use the money for the business.
Are you low or out of cash and looking for capital to fund your business operations quickly? Don’t want to make fixed monthly payments on traditional business loan? A business cash advance is the best financing solution for you.
Benefits Of Merchant Cash Advance
- You don’t require an excellent credit history to qualify for cash advance.
- Get quick access to cash in just 24-48 hours.
- Easy application and approval process.
- Cash-flow friendly funding!
- Bad credit is not a problem.
- No fixed monthly repayments
- No limits on the use of cash.
- The payments are automatic. You don’t need to write checks.
- Quick, short-term, hassle-free funding
In case you’re making sufficient amounts of cash and with the right amount of increased sales, cash advance can make good sense. However you need to be intelligent and knowledgeable to use it productively. Merchant Advisors will closely work with you to understand your financial requirements and offer the best financial solution. We will offer you the most favorable financing options up front.