subject: A Business Cash Advance: Better Than Business Loan [print this page] Business cash advance, the entire idea was conceived with the aim of bailing out minority business from their perennial working capital problem. What is all the more laudable about a business cash advance is that such an arrangement tried to accommodate the fund requisites of women entrepreneurs. Women who aimed to own a business of their own have had always faced problems with funding their ventures, probably a little more than any male proprietor would have faced.
In order to praise the service of business cash advance and making the big claim that it is a better funding option than traditional business loan, it is necessary to have a fair enough idea of the service itself. Let us gather at least a very basic knowledge of this very new and progressive funding arrangement.
What is a business cash advance service actually?
This is nothing extra-ordinary. The whole idea is to provide cash advance to business against their future credit card sales. What a business cash advance service provider does is to buy a definite amount of expected credit card sales at a discounted rate.
By now it becomes utterly clear that in order to avail the facility of business cash advance the business should have the provision of credit card transactions. If not then it should arrange for the same immediately. In fact many cash advance service providers have links with credit card service providers and can set up the business with the latter.
How to apply for the cash advance fund?
The application process is rather simple. All a business owner needs to do is to merely fill up a three page long form. Along with it he/she has to submit the last four months bank statements and last three months credit card sales.
Cash advance does not need any security collateral, any personal guarantee. The best part is that even a relatively newer venture can apply for business cash advance. Banks do not offer traditional business loans to new business because they cannot evaluate the repayment capacity of the new business. But it is at the initial stages that a business needs the maximum monetary support.
How much fund can be raised through a business cash advance?
The amount of cash offered varies from one service provider to another. The upper limit varies from $250,000 to $500,000.
The actual amount is determined by the actual volume of credit card sales recorded by your business. Usually the cash advance fund is 1.5 times the average monthly credit card sales.
How to repay the cash advance fund?
The cash advance fund repayment is a flexible procedure. The lender gets back his money whenever the business has credit card sales. This is a smooth arrangement. The borrower pays only when he/she is in a condition to do so. When the business is not earning enough revenue there is no need to pay. What is all the more incredible is that with business cash advance there is no fixed interest.
Now when you face working capital paucity, you know how to fix the problem.
