Business Cash Advance Vs. Small Business Loans


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Every business owner who has ever tried to get a business loan knows how difficult it is to get the money out of those banks and financial institutions. Surprisingly enough, these same people don’t need to be coaxed for a personal loan even if you are going to spend all that money for a pleasure trip or buying a car, but if you are looking for a business loan that is likely to give you a good ROI, you need to fulfill a bunch of criterions to qualify. One of the prime criteria for getting a business loan is to have a good credit score and unfortunately over 92% of the American population does not qualify for a business loan including the Small Business Administration (SBA) Guarantee Loan Program.

Credit Score is just the tip of the iceberg, even if you have a good credit score, you will have to provide the bank with financial statements, audited tax returns, business plan, a personal guarantee or collateral and meet other regulatory requirements set forward by the financial institutions.

Most banks would not even consider offering a business loan if you are

a) New in business
b) Have low credit score or no credit or credit problem
c) Do not have enough collateral
d) Need under $100,000

Also a business loan brings with it the liabilities of making monthly repayments of fixed amounts.

While it is so difficult to obtain a business loan, it becomes pretty easy to get some funding if you opt for a business cash advance. A business cash advance company would offer cash even to people with relatively low credit score. Most business that accepts credit cards and are in business for more than 2 years qualify for a business cash advance. A business cash advance is similar to a factor company except for the fact that it uses your future credit card receivables instead of business-to-business receivable invoices.

A business cash advance does not require a personal guarantee or a collateral neither is there a fixed monthly repayment schedule. Business cash advance is repaid automatically through Visa or Master card sales. A business cash advance is a much easier option compared to business loans. A cash advance provider would not take equity ownership of your business and you are free to use the money for any business purpose you see fit.

As the cash advance provider gets paid only when you sale and get paid, it is more of an investment to them. The repayment of your business cash advance follows the revenue trend of your business and your cash sales are never used for repayment. This ensures that it is never a burden for you to repay the cash advance.

If your business needs an injection of cash flow it is time you apply for a business cash advance and start enjoying the financial stability.

This article is written by Ray Smith, a marketing expert with years of experience in different industries and specialized knowledge on branding and Internet marketing.

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