The current economic crisis has seen a new funding source emerge to bail out small businesses – Its called Business Cash Advance.

Commercial bank loans, and in particular small business loans, have been one of the casualties of the financial meltdown. This has resulted in small business owners and merchants requiring an excellent credit rating to qualify for traditional small business loans in this current economic environment. And If you do qualify, you risk losing your homes and personal property if used as collateral for such loans.

But, cash flow is the lifeblood of every small business. It is used to for necessary working capital – to pay employees, suppliers, stock up on inventory and invest in business expansion. And Cash advance businesses have stepped up to bail out small businesses on main street. Their process of extending small business cash advance does not depend on your credit score. A good credit score is definitely a plus, but not the most important factor to getting a business cash advance. If you have been in business for more than 1 year and have atleast $5000 USD in monthly credit card sales, your small business is an ideal candidate for a business cash advance.

There are many advantages to taking a business cash advance:

1. Simple and Easy Application process

Business Cash Advance Companies need only two details from the small business — monthly credit card sales and the length of time in business. This is unlike banks where two year tax returns, financial statements and business plans need to be furnished to be considered for a small business loan. Most cash advance businesses expect at least $5000 in monthly credit card sales and a minimum of 1 year in business for you to qualify for a business cash advance.

Repayment of the cash advance is also simple. The credit card processing companies that handle the credit card processing for small business deduct the mutually agreed percentage amount of all future credit card sales and deposit this amount in the bank account of the business cash advance company until the loan has been fully paid back.

2. Quick disbursements

The cash advance business can easily verify the credit card sales and credit score as the information is available online. There is no other paperwork required for business cash advance approval. The approval goes through quickly and the business cash advance is disbursed to the small business within 2 weeks or less. The small business can use the funds for immediate working capital needs such as paying off creditors, sale promotions or investing in business opportunities such as expansion, e-commerce website etc.

3. No collateral is required

Small business owners are often in danger of losing collateral if they are unable to pay back a traditional small business loan. As business cash advance companies do not need a collateral against the loan, small business owners can do away with that worry. Moreover, the relation between the cash advance businesses and the small business is that of a buyer and a seller, not a creditor and a debtor. The cash advance business has purchased a percentage of the credit card sales on a discount in exchange for the small business cash advance. The credit report of the small business will not be impacted by this transaction.

4. High approval rate

Business Cash Advance companies place their trust on the small business’ capability to keep performing rather than its credit history. Most small businesses that have more than 1 year of business history will qualify for a business cash advance. The amount of the cash advance depends upon the average monthly credit card sales revenue of the business in the previous year.

5. Performance based re-payments

The best part of a business cash advance is that it is paid off in amounts that are proportional to the credit card sales receipts of the small business. If the small business has good sales month, the cash advance business get paid more. If the business has a slow month, so does the business cash advance company. This arrangement frees the small business from the pressure of sufficient monthly sales to pay off fixed installments. The business cash advance companies share the highs and lows of the small business.

Low interest loans are ideal for business plans with a long term horizon. However, if the small business needs funds immediately, business cash advance is the best option as it is approved and disbursed in less than 2 weeks. It has been the only bail out available for main street small businesses to survive this great recession.

Tags: Business Cash Advance

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