subject: Phoenix Small Business Loans - Is A Business Cash Advance Right For You? [print this page] Phoenix Small Business Loans - Is A Business Cash Advance Right For You?
Having bad credit makes it especially difficult to get a business loan in such a tight credit market. Having little credit and little or no collateral also means that you will probably have a more difficult time getting a traditional bank loan for your company, according to Phoenix small business loans experts.
Obtaining a traditional loan is already difficult these days. So having bad credit and/or little to no credit or collateral can be stifling for the small business owner. Phoenix small business loans officials state that if a business owner cannot get a traditional loan they do still have financial options.
One of these options is to get a business or merchant cash advance. There is no question that business cash advances are quite similar to payday loans. Phoenix small business loans authorities point out that they often have a negative stigma attached to them because of this. However, for some companies this may be an only option and an option that has many perks for business owners.
How Business Cash Advances Work
You receive a lump sum of money, let's say $30,000, from a cash advance lender.
You pay the lender back by giving them a percentage, let's say 15 percent, of each debit and credit card sale that you make until the money is paid off.
Quick Application Process
Unlike traditional loans and other financial lending options there is very little paperwork involved in applying.
There is also a quick turn around. Typically you know within 48 hours if you qualify for the cash advance.
Also, unlike a traditional loan, having bad credit or no credit is not a big factor in whether or not you will qualify.
No Scheduled Due Dates Or Fixed Payments
One of the biggest perks for some businesses is that they are not tied to a strict pay schedule. The "payments" are taken out of each sale.
This also means that there are no fixed payment amounts. The "payment" is determined by the amount of each sale from which a percentage is taken out.
This is beneficial to some companies because it means that they do not have to stress if sales are slower during certain periods.
Must Have Merchant Bank Account
Business cash advances are great for companies that have a high volume of sales paid with debit or credit cards. For example, many start-up restaurants use business cash advances to get started. And to get a business cash advance you must accept debit and credit cards because the advances are only set up to take a percentage from debit and credit card sales. If you do not already accept these forms of payment you can easily set up a merchant bank account to get going.
Consider Interest
One thing to keep in mind before applying for a business cash advance is interest. The equivalent amount of interest paid over the length of time that it takes to pay off a business cash advance is much higher than with a traditional bank loan. Phoenix small business loans experts state that if you have bad, little, or no credit or collateral, all other financial options available will have much higher interest rates if you cannot get a traditional loan.
Still, it is important to keep in mind that business cash advances will have an even higher interest than many other financial options. They do however present some interesting perks over other financial options that might work well for your particular company.
