Credit Card Factoring In Comparison With Unsecured Business Loans

A great benefit to unsecured business loans over traditional bank loans is that there is no collateral necessary to back them up

. These unsecured business loans can be made on the basis of the credit history of the small business owner, and are often times referred to as signature loans. However, unless you are on good footing with a private lender, or your business has an outstanding credit history, it is very improbable that you will be approved for a very high loan amount - that is if you can manage to get one at all.

If your business's credit history is not well seasoned, but you yourself do have outstanding credit score, it is possible that you may be able to get unsecured business loans with a personal guarantee. Still, this brings to the forefront your personal monies, as you become the person of last resort if your daily business operations can't keep up with the loan obligations.

On the other hand, it is much simpler to get monies from Credit Card Factoring (a.k.a. business cash advance), which does not rely on your credit history because it is not a loan. Credit worthiness doesn't generally play a very important part in the approval process for a business cash advance, because it is repaid from the credit card revenues generated on a daily basis by your business.

The merchant cash advance really comes from the discounted purchase of a percentage of your future Visa-MasterCard receipts by the cash advance provider, so it doesn't need you to make set monthly payments like a traditional bank loan mandates. You should stay away from entering into a contract with any business cash advance cash advance provider that needs you to put up collateral or give a personal guarantee - this is simply not necessary for this type of transaction.

The approval chances for a business cash advance is way larger than that of unsecured business loans, and it is possible that you will be able to get a more substantial amount of financing with this method, as well.

by: Daniel Samoohi

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