Today we will be talking about the components which make up the small business cash advance. You may not be familiar with this term or it may seem to be used interchangeably with other terms such as a business loan. Also what differentiates a cash advance from a loan and what constitutes a small business. We will be discussing these subtle but important differences in today's discussion and hopefully we will come to a better understanding of this type of business lending.
The small business cash advance is a type of advance offered specifically for small businesses. Cash advances tend to have a bit of a negative reputation as they are known for high interest rates and fast repayment requirements. However this characterization is not completely fair as there are some advantages to this type of lending as well. So what is meant by a cash advance first? Cash advance works very much like a loan only it is dispersed more quickly to the borrower.
They can sometimes be funded and as quickly as 72 hours and so if your business some type of emergency need for funding this may be a good choice for you to pursue. Understand that whenever you are deciding whether or not to borrow money that you are borrowing it for some purpose.
It is not honest to only compare the interest rates between two loans. This would only be valid if both loans could be obtained under identical conditions and in the same amount of time. So if your business is losing $100 a day and potential revenue because of an emergency then a loan which only cost you $10 a day interest is a very good deal.
How is it determined that you have a small business if you are looking for a cash advance designed specifically for small businesses? Is a question that is not have one exact answer as there are varying definitions for what constitutes small medium or large businesses. The criteria typically revolve around the amount of revenue that is brought in each year and the amount of employees you have. Small businesses are those which have less than $100,000 in yearly revenue for under 500 employees under most definitions. However as stated above these definitions are not set in stone.
So to recap, a small business cash advance is a fast loan with high interest designed specifically for small businesses. They typically have easier requirements than long-term loans from traditional lenders and can be received in a much shorter period of time assuming that all necessary steps are followed correctly and in a timely fashion. There is no one set definition for a small business and you should ask the cash advance lender if they have specific programs for small businesses such as your own.