Two of the major sources of small business funding come in the form of business cash advances and bank loans.  Many small business owners don’t qualify for bank loans, either due to lack of collateral or poor credit, but those aren’t the only reasons to seek an alternative. 

Cost

“Banks add a lot of other costs to their loans – including fees, reporting requirements, covenants, etc. that are not included in their rates but make the overall cost of their loans higher.” – business know how

While a business cash advance may come with a higher interest rate, it is generally not enough to truly offset the fees and time investment required by bank loans.  Additionally, because banks require you to take out a large sum of money and repayment is spread out over the course of years or even decades, bank loans can end up costing your business more in the long run.

Flexibility

“By looking beyond the traditional methods of business financing, you may well be able to access capital which better suits your needs and your business growth plans.” – Business Matters

As no one knows your business better than you, cash advance lenders offer the flexibility to spend the money as you see fit.  While it is best to have a plan in place, often times unexpected expenses or opportunities arise that are a better use of your money.  Even if major improvements aren’t necessary, simply having cash on hand will help you seize opportunities to grow your business.

Opportunity

“Banks have stiff regulations that pretty much forces them not to lend to new or small, growing businesses.” – business know-how

If you’re just getting started or run a small operation, bank loans are nearly inaccessible.  Banks need their customers to meet baseline criteria to even be considered for a loan.  New small businesses rarely meet these guidelines.  Thankfully there are alternative lenders that offer small businesses a way to grow.  Many lenders specialize in certain industries so you have the opportunity to work with someone who has the experience and know how to help you spend your funds wisely.

Approval

“A lot of business owners don't have the time or the option of going through the SBA application process, either because they do not meet the basic requirements to get an SBA loan due to poor credit, no collateral, et cetera, or they don't have the time to invest in a two- or three-month long application process.” – Business.com

With a business cash advance, approval is based primarily on your monthly credit card receipts and in most cases, you can receive your money within 7 days.  The ability to pivot quickly is one of the major advantages small businesses hold over larger competitors.  A business cash advance gives you the flexibility to act when opportunities or emergencies present themselves.