There are a variety of ways to obtain funding for your small business with each having their pros and cons. A business cash advance offers small business owners a fast and flexible alternative to traditional loans and it’s far easier to get approved. Here we take a look at the features, benefits and uses of a small business cash advance.
Business Cash Advance Features And Benefits
There are some stark differences between business cash advances and traditional bank loans. For those that don’t have the time, credit or collateral to apply for a bank loan, a business cash advance offers a viable and safe alternative to help ensure the present and future health of your small business.
- Payments: Traditional loans typically require fixed payments over a predetermined period of time. A merchant cash advance is repaid with a percentage of credit card sales, which works well because payments are flexible and fluctuate with sales. When sales are down, businesses don’t have the burden to make fixed payments. When sales are booming, payments are higher and allow business to repay the cash advance quickly.
- Credit: Bank loans are decided based on credit score and are reported to credit agencies. Business cash advances place emphasis on a business’s credit card income. Since it’s not a loan, the cash advance is not reported to credit agencies.
- Collateral: Bank loans typically require a business owner to put up collateral. In the event the loan goes into default, the business owner risks losing the asset. Business cash advances require no collateral – instead, the business is trading a portion of its future credit card sales.
- Speed: The application process for a traditional loan can be long and intrusive. It can take a month or more to finalized and fund. Many small businesses cannot afford to wait and risk losing an opportunity or ability to respond quickly to an emergency. Business cash advances offer a quick and easy application process and cash can be available within a week.
Uses Of A Business Cash Advance
Unlike a bank loan that can restrictive of what it can be used for, a business cash advance can be used for a wide variety of applications. Whether it is a growth initiative or simply maintaining operations, the uses of a business cash advance are nearly limitless.
- Interior Renovations – Make your interior brand new, make repairs or simply decorate to make your atmosphere more inviting.
- Storefront Improvements – Put in new windows, incorporate outdoor seating or even invest in a whole new façade.
- Equipment Upgrades Or Replacement – Make your business more efficient with new equipment or simply repair or replace faulty machines.
- Marketing And Advertising – Get an edge on the competition by investing in long-term marketing initiatives, digital advertising, events and more.
- Signage Improvements – Signs are still a great way to draw in customers and advertise specials. New exterior and interior signage can also give your business a modern, fresh look.
- Inventory Purchases – Every business needs inventory to function. Having the available cash to seize discount and bulk purchase opportunities can make a major difference to your bottom line.
- New Locations – If your business is fortunate enough to be thriving in its current location, the next step may be expanding into a new location.
- Hire Employees – Whether it’s temporary help or hiring on a marketing or finance specialist, brining on the help you need to grow your business is another great use of a business cash advance.
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