Business Cash Advance
When your small business needs an infusion of money, a business cash advance may be the option for you. Instead of taking out a small business loan, a business cash advance allows you to borrow money against your own future sales. As long as you are making sales, repayment of the advance is a simple process that is handled through your credit card merchant account.
Why Get a Business Cash Advance?
Nearly every small business experiences a shortage of cash from time to
time. Perhaps business has been so good that you find yourself with an
immediate need to expand. Maybe you need to bring in some new inventory.
Whatever the need, you may find yourself considering a business cash
advance. Many small business owners also consider this option when they do
not have great credit and are unlikely to qualify for a business loan.
Credit Card Sales Are the Key
If your small business processes credit card transactions, then you likely
qualify for a business cash advance. After your application is accepted,
you are given a certain amount of money with the understanding that it will
be paid back through your future sales. Each time you process a Visa or
MasterCard transaction, a percentage of the sale goes to repay the business
cash advance. These small payments are made until the entire amount has
been collected.
Qualifying for a Business Cash Advance
The biggest factor in qualifying for a business cash advance is having a
Visa and MasterCard merchant account. Unlike a business loan, the money is
simply an advance on your credit card receipts, so your small business must
have a merchant account to accept this type of payment. In addition, you
may need to prove that you do a minimum amount of credit card business each
month. This ensures that you will be able to repay the business cash
advance. Finally, you may need to share your personal or business credit
history, although this is not always the case.
Benefits of a Business Cash Advance
If a business cash advance seems like the right choice for your small
business, you'll find several benefits. For example, your credit history is
unlikely to keep you from getting the advance. Repayment is simple, since
the money is taken directly from your merchant account. This means there is
no set repayment schedule, as it is based instead upon your credit card
receipts. Additionally, you will probably not be asked to supply
collateral.
Like any financial decision, you should carefully consider the choice to apply for a business cash advance. Take into consideration your needs and how well your small business will be able to repay the advance. Consider whether a small business loan or a business cash advance might be the right step to help your business grow.
