Cash Advance for Your Business

cashCash Advance for Your Business

Most business owners apply for additional funding to get their companies up and running. Bank loans are the lifeblood of businesses and lending institutions alike. It is a symbiotic relationship. The business receives the money it desperately needs to build or expand and the bank receives interest payments from growing businesses. But the old dynamic has been affected by the recent recession.

The contemporary lending climate in America has been erratic, at best. Because they were burned during the economic downturn, banks have tightened their collective purse strings with regard to business loans. As a result, many new business owners, especially small business owners, cannot secure traditional bank loans. More often than not, these companies are forced to close their doors when they fail to obtain outside funding.

What is the solution? 

The so-called credit crunch has forced millions of American business owners to search for affordable alternatives to bank loans. In most cases, a business cash advance is the most attractive option.

What are they? 

In order to obtain a merchant cash advance, a business must accept electronic payments (debit and credit cards). Since these payments are used to repay the loan, businesses must process a minimum of $1,500 to qualify for a cash advance. Because these loans are unsecured, which means that no collateral is required, the acceptance rate is much higher than it is with traditional bank loans.

What are the benefits? 

Not only are they easier to obtain than bank loans, but cash advances get you the money you need in a flash, often within 24 hours. Best of all, applicants are not asked to jump through hoops. You will not be asked for a comprehensive business plan or a mission statement. And even if you compete in a high-risk industry and have a checkered credit history, it is possible to secure a business cash advance. By comparison, high-risk clients with bad credit rarely qualify for bank loans.

What are the drawbacks? 

Because they generally lend money to riskier clients and they do not require collateral, cash advance lenders typically charge higher interest rates than the banks. But the rates are not as high as many business owners suspect. On recent visits to some of the top cash advance lenders, we discovered fixed interest payments between 9.99 and 10.99 percent. Yes, that is more than the rate for most business loans, which typically range from 4 to 6 percent. But we must remember that many business owners cannot qualify for these loans in the current economic climate.

At the end of the day, cash advances are a viable option for business owners who have been rejected by the bank and need quick cash now. As long as your business processes at least fifteen hundred dollars in credit card payments each month, there is an excellent chance you will qualify for a loan.