Top 5 Advantages of Business Cash Advance

Posted by Alisha Sanchez on September 27th, 2017

Cash flow is very important for small and medium-sized businesses as it is used to pay suppliers, maintain inventory and grow the business. Many businesses today are turning to business cash advance to get funding for their businesses.

A business cash advance offers an alternative source of funding for business owners who lack the collateral or credit rating to secure a commercial bank loan. Unlike bank loans, merchant cash advance involves exchanging a part of future business credit receipts for a certain amount of money, usually a lump sum. The lump sum is paid after an agreement has been reached between the two parties involved. In return, the business cash advance provider gets the rights to reclaim a part of the business credit sales every month, usually 8% of the total credit card receipts. Here are the benefits of getting a business cash advance:

1# No Collateral or Credit Required

A business cash advance loan is usually regarded as a sales or purchase transaction, not a loan. Therefore, it doesn’t have any effect on your business credit score, unlike bank loans that can damage your credit report. Entrepreneurs who take a business cash advance also avoid the risk of losing their collateral, making it a safer option for funding businesses

2# Easy to Apply and Disburse

You can get a business cash advance form online, and the application process does not require business plans, financial statements or tax returns as accompanying documents. Business cash advance providers consider only two criteria: number of years in business and monthly credit returns. Basically, you are required to have credit sales of over ,000 every month and at least 9 months in business to qualify for a business cash advance loan.

3# Quick Turnaround

Merchant cash advance requires very little paperwork; therefore, the application turnaround time is very short and you will be able to receive your funds within a week after submitting your application. You don’t have to wait for several weeks or months to get the funds, unlike bank loans.

4# High Approval Rate

Business cash advance providers value the performance of your business over credit. This makes it easy for any business to secure funds without struggling. Your business cash advance funding amount depends on your monthly revenues.

5# Revenue-based Collections

A business cash advance provider only gets paid when you get paid. This is one of the main advantages of business cash advance over bank loans. Unlike bank loans that require fixed monthly payments, merchant cash advance collections vary depending on your sales volume. During high sales months, the MCA provider gets a highly monthly sum, and in low sales months, he receives a smaller amount. This percentage-based collection method allows the business advance cash provider to support the success of a business rather than draining it.

If you are looking for quick and safe cash infusion to your business, then a business cash advance is an attractive alternative. Since the business cash advance provider collects a certain percentage of returns, it is easier for business to grow.