subject: Business Cash Advances Vs Unsecured Business Loans [print this page] A great plus to Business Cash Advances over traditional bank loans is that there is no collateral needed to back them up. These unsecured business loans can be written on the basis of the credit scores of the entrepreneur, and are regularly referred to as signature loans. However, unless you are on excellent footing with a private lender, or your business has an excellent credit rating, it is really unlikely that you will be a legitimate candidate for a very high loan amount - that is if you can manage to get one at all.
If your business's credit score is not well built, but you yourself do have outstanding credit score, it is probable that you may be able to get unsecured business loans with a personal promise. Still, this exposes your personal monies, as you become the person of last resort if your day to day business functions can't keep up with the loan obligations.
On the other hand, it is way simpler to get funds from a Merchant Cash Advance, which does not depend on your credit rating because it is not a loan. Credit worthiness does not generally play a very important part in the approval cycle for a business cash advance, because it is repaid from the credit card transactions generated on a day to day basis by the business.
The merchant cash advance really originates from the discounted purchase of a portion of your future Visa-MasterCard transactions by the cash advance agent, so it doesn't force you to make set monthly payments like a normal bank loan requires. You should stay away from doing a contract with any business cash advance cash advance provider that needs you to put up collateral or provide a personal guarantee - this is simply not necessary for this type of transaction.
The approval rate for business cash advances is much better than that of unsecured business loans, and it is possible that you will be able to get a larger amount of funds with this method, as well.
