Business Cash Advance Funding Financing for Small Businesses

If you have a merchant account and process over $1,500 per month in transactions you have an opportunity to receive a cash advance for up to $300,000 with little regard to your personal credit score. A business cash advance is just that, cash advanced to you! How ever it is not a small business loan, and is not reported against either your business or personal credit history.

The money is advanced against a portion of your future Visa and MasterCard sales, and repaid by taking a small % of each transaction until it’s repaid. A portion of your future credit card sales are purchased at a discount and that is the only charge; there is no interest, application, closing fees, or fixed payment schedule. The business cash advance typically does cost more than a bank loan, but instead of the weeks and weeks and guarantees required to go thru the bank small business loan process (and assuming it’s approved), the business cash advance funding approval is usually within 24-48 hours and funding within 5-10 days. As this approach to getting working capital becomes more popular (300% increase this year over last), the times for both approval and funding will become extended.

I mentioned this option to a retail small business owner the other day and his response was that the fees are too high and he didn't feel it was worth it. I mention this because every type of financing has different requirements, fees, interest rates and terms. Some will fit your needs while others won't. It's up to you to decide what's best for you, however, it is also best to find financing before you need it. So regardless of your situation you should have something in place. You never want to be applying for a loan with a bank on Monday in order to make payroll on Friday. (I've seen this too often.) And, in case you have not checked lately, banks now on average decline 92% of small business loans.

If you have excellent credit (720+ FICO Score) you may want to first look at other financing options, usually a bank loan. The bank rules have changed in the past few months, so you should probably check first rather than assuming it would not be an issue. However, if you have less than excellent credit or not an acceptable debt to earnings ratio, and accept credit cards and your Visa/MasterCard charges exceed $1,500 per month a Business Cash Advance Financing option may be exactly what you need.

The fact that with traditional loans, you usually have to sign personally or put up collateral, make a fixed payment each month regardless of how your business is doing, and have the business loan reported on your credit reports should be also considered when making a decision on what avenues to pursue when you need to get an injection of working capital.