Understanding Business Cash Advances

Many small merchants and entrepreneurs do not realize the benefits of business loan and cash advances because for one, they do not know how it works, and two, they are not much willing to learn the pros and cons of such effective financing instrument. Many small businesses and enterprises qualify for a cash advance. Some are even eligible for a sizable loan up to $500,000. Also known as merchant cash advance, this financing tool is great for business owners and entrepreneurs who have poor credit standing and have a hard time obtaining a conventional bank loan.

The concept of business cash advances is simple. If you have an established business and your enterprise requires immediate funding yet you are not qualified for a bank loan for whatever reason, or you do not have the luxury to wait for a bank’s approval, then a business cash advance is the best alternative for you. Listed below are some of the things that you might want to go over to make sure you qualify for a business cash advance.

Startups are not qualified. Most, if not all, cash advance providers require a company to be in operations for a significant amount of time before they can be considered for the service. The standard qualification for length of operations is usually 6 months to one year. If your company is less than 6 months old, you might want too explore other financing options instead.

Accepts VISA/MasterCard as standard form of payment. The usual form of repayment employed by most lending companies is by charging a specific amount against the business owner’s business credit card. This amount is placed against his future credit card receivables. For a specific period of time, the lender will take out a percentage from the card’s sales. Aside from using VISA/MasterCard, lenders also require business owners to process at least $5,000 a month before they can be considered for the service.

No indications of bankrputcy. If your company has declared bankruptcy, lending firms will not consider your application for a cash advance. If your company has declared bankruptcy, it is hard to find a lender willing to work with your funding needs unless if you can show them that you have been out of bankruptcy at least for a year.

These are some of the pointers that you might want to know if you are looking to apply for business cash advances. That said, it is always best that you personally visit your lender and discuss your available options and map out your financing scheme.

Related articles

• Where To Look For Fast Business Loans (dohertyassoc.com)
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• Small Business Loans — which option is the best? (bayviewhunterspoint.com)

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