The Benefits of a Business Cash Advance For Startup Funding

Unfortunately, in today’s economic environment many business owners can no longer count on traditional sources of financing, such as a bank loan, credit card, or home equity loan. Whether it is due to a lack of collateral or meeting the bank’s credit requirements, traditional sources have become more restricted over the past couple of years.

This has resulted in a surge of alternative financing programs geared to meet the needs of small to medium sized businesses operating in the U.S. Programs such as accounts receivable financing, crowd funding, vendor lines of credit, merchant cards, and seller financing make it possible to obtain the capital needed to grow a startup business. The purpose of this post is to share with you the business cash advance program as a viable alternative start up funding option.

This program is a cost-effective way to obtain the immediate cash you need, without having to wait weeks on end for an answer from a lender. A business cash advance is similar to a loan because your company will receive the funding it needs and the money will need to be paid back. However, there are several distinct differences that make this program very attractive. For example, a business cash advance does not require the following: Collateral Formal business plan Financial statement Shares in equity ownership Disclosure of business assets Fixed payment schedules or due dates Additionally, you are not faced with costly interest rates, upfront costs, closing costs, or late fees that are pretty standard with traditional loans.

The amount of cash which can be advanced to your business is based upon the cash flow from your monthly credit card sales. In order to qualify many cash advance companies require that you process a minimum of $1,500 in credit card sales per month, and be in business for at least one year. You also must provide 3 months of sales records, so let’s say your company currently processes $5,000 per month on average. With those numbers you can expect to get pre-approved for approximately $6,250 and have funds in as little as 10 days with some programs.

Paying back a cash advance is simple because it is repaid through future credit card sales as they are processed through your company’s merchant account. The cash advance company will automatically deduct a small percentage of your monthly credit card sales. There are no payment schedules to worry about because all payments are automatic. This makes a business cash advance an excellent alternative to traditional funding programs. With no personal guarantees, personal credit checks, or collateral requirements, a business cash advance may be just what your company needs. Best of all, once you establish a relationship with a provider; future cash advances are readily available throughout the life of your business.