Small business owners are becoming more aware of the benefits of seeking alternatives to traditional bank loans to fund their businesses. As bank loans become more restrictive and difficult to obtain, business cash advances continue to grow in popularity. Here we take a look at six reasons small business owners are choosing alternative funding.
Obtaining Cash Quickly
In any small business, there will be times when you need money in a pinch. For example, a necessary piece of equipment breaks down and it needs to be replaced. Most small businesses cannot afford to close the doors. With a business cash advance you can receive your funds in a far shorter time than with a bank loan, thus eliminating costly downtime. In addition, if you’ve had a slow month and you are having difficulty making payroll, a business cash advance is the only way to get cash fast enough to cover it.
Funding For Smaller Amounts
Most banks are very hesitant to offer loans for small amounts. In fact, anything under $200,000 can be very difficult to be approved for. With a business cash advance, the threshold is much lower. This allows you to make small repairs or improvements without having to borrow more than you need. This prevents you from going into debt when it’s not necessary.
Shorter Repayment Terms
Traditional loans can carry extremely long payment terms that can last 10 to 20 years. These types of loans can carry heavy interest rates that compound year to year. Sometimes you do have the option to pay them off early, however, in most cases you will incur a large fee. With a business cash advance the repayment terms are significantly shorter. A reputable business cash advance company wants to do what’s in the best interest of the business owner.
Approval With No Collateral
One major obstacle a small business owner comes across when they apply for a bank loan is having a lack of collateral. Owners who are just starting out are unlikely to have the collateral necessary to obtain a traditional loan. An unsecured loan is a risk that most banks are not willing to take. With a business cash advance, approval is based upon monthly credit card sales and other factors that make it unnecessary to provide collateral.
Approval With Bad Credit
Since credit is not as heavily weighted in the approval process for a business cash advance as it is for a bank loan, those that do not have great credit still have an excellent opportunity to receive funding. Credit scores can go south for a myriad of reasons and it does not always mean that a business has been irresponsible with their money. Business cash advances consider that fact and in most cases are able to work with owners that have low credit scores.
Seizing Growth Opportunities
As a small business owner, you never know when a great opportunity is going to present itself. Let’s say a prime location becomes available and it would be the perfect place to set up a second location. Having to take the time to wait on approval from a bank can severely damage your chances of obtaining the property. Since a business cash advance is much faster and easier to be approved for, this makes it a great option to investigate when you’re thinking of expanding your business.
Let Quikstone Capital be your funding partner!
