All business owners who have ever tried to get business loans know how hard it can be to get money out of those financial institutions and banks. After all, you need to submit an entire load of documents, in addition to meeting several eligibility requirements and fulfilling numerous criteria. One of the primary criteria is to have a good credit report, which many business entity might not be able to reach good credit status, thus failing into bad credit business loans category if they were to seek financing from banks.
Even if you are having a good credit score, you have to provide financial statements, business plan, audited tax returns, collateral and personal guarantee, apart from meeting other regulatory obligations set forward by the bank or the financial institutions.
Most of them will not even consider your application if you are new in the business, you have a low credit score or an other credit problem, you need less than $100,000 loan amount and you do not have an attractive collateral to stake. In addition to all this, business loans also bring with them the liabilities of making repayments every months of a fixed amount.
While it is extremely difficult to get a business loan, it becomes very easy to fund your business if you choose to apply for a business cash advance. This kind of financing option offers you cash even if you have a relative low credit score. Most of the businesses that accept credit card payments and have an experience of at least 2 years in the industry are qualified for business cash advance. This kind of financing is very much similar to factoring, except the fact that it makes use of your future credit card receivable, in replacement of Business to Business Invoice Receivable.
A business cash advance also does not require any collateral or personal guarantee and it also does not have any fixed monthly repayment schedule. This kind of loan is automatically paid through your credit card sales and when we compare it with a business loan, it seems to be a much easier option. The cash advance provider will not take your business’s equity ownership and thus, you are allowed to use the available cash flow for any business purposes you want.
The cash advance needs to be repaid only when you have made your sales and you have been paid. Thus, it is more like an investment to the financing providers. Therefore, if you need to give a boost to your business’s cash flow, then it would be wise to apply for business cash advance, instead of a traditional business loan.