Already on ArticleSlash?

Forgot your password? Sign Up

A Credit Card Advance Or A Small Business Loan?


Visitors: 165

We all know that having enough working capital is an essential component for every business venture. Even established small businesses will run into cash flow problems at one point or another, understanding your funding options is simply vital. A business cash flow can be easily disrupted because of many reasons: debt payments, the need to purchase or lease new equipment or simply be able to meet the daily costs that all merchants go through. As there are many options business owners can choose, it's very important that such options are properly understood. The financing option you may choose is a very important element, which could determine the ability of running a successful business.

Now days, a credit card advance is a very popular way to obtain business funding. This type of funding greatly differs when compared with a traditional business loan, a credit card cash advance is perfect for a merchant to get funds even when he lacks of perfect credit or doesn't have the ability to get funds by other means. One of the simple requirements that credit card advances have, is that the business owner accepts credit cards as a form of payment; especially it's required that the merchant processes Visa and Master Card. The payback is much simpler than a loan as there are no fixed monthly payments and the payments are automatically deducted from every credit card transaction as a small percentage.

On the other hand, a small business loan is the most common funding choice for small business owners. But if compared with cash advances, getting funded is extremely complicated. The requirements for the debtor are many, like: the credit score of the debtor has to be perfect, over 750; the merchant has to have important personal assets that can be used as guaranty and many other factors are carefully examined before acceptance of small business loan. Instead, most small businesses can qualify for a fast and simple credit card advance, which is completely unsecured, meaning that there are no personal assets to risk.

Acquiring a small business loan requires lots of paperwork and anywhere between 2 to 4 months until the actual funding takes place. That certainly doesn't apply to a credit card advance or business cash advance, as the application process is a simple 2 pages application, and the funding can take place in as little as 7 days. When acquiring a traditional small business loan, your business will be strained with strict fixed monthly payments, whether you sell or not. That's not the case when it comes to credit card advances, as you make small payments only when you sell your products or services in credit card transactions. Failing to repay a credit card advance won't put in risk your personal credit nor it will risk any personal assets the merchant may have, however in the case of a small business loan, if the debtor fails to pay the loan, it will not only harm your personal credit score, but it will also pose the risk of losing your assets.

Keeping all these in mind, you can easily tell that a credit card advance is a much easier and risk-free way to obtain the much needed funding your business needs.

Gaston C. writes Credit Card Advance and Business Cash Advance articles for Merchant Resources International - To Learn more Visit Us at


Article Source:

Rate this Article: 
A Credit Card For A Small Or New Business Can Be A Powerful Monetary Tool
Rated 4 / 5
based on 5 votes

Related Articles:

Do You Need a Small Business Credit Card?

by: Max Anderson (June 10, 2007) 

Small Business Debt Solutions - How to Settle Your Small Business Credit Card ..

by: Matt Couch (December 23, 2009) 
(Finance/Debt Management)

Small Business Credit Card Review

by: Stanley Morse (June 05, 2007) 

Small Scale Business Credit Card

by: W. M. Blake (September 28, 2008) 

Credit Card Advance - Debt Trap Advance?

by: Milos Pesic (December 13, 2007) 

UK Small Business Loan Bad Credit - Bad Credit is Not a Matter of Concern

by: Michael Brian (June 19, 2008) 

Use A Small Business Credit Card to Manage Your Business

by: Pamela Williams (January 20, 2008) 
(Business/Small Business)

Small Business Loans and Credit Card Factoring

by: Gaston Castro (September 30, 2008) 

Manage Your Finances With A Small Business Credit Card

by: Anthony Begley (March 28, 2008) 

A Credit Card For A Small Or New Business Can Be A Powerful Monetary Tool

by: Bonnie Archer (June 03, 2007)