Business cash advance loan or a merchant cash advance is aimed at the business community with regular – rather every day credit card sales. Therefore, the primary eligibility criteria for business cash advance loan is that the business should generate credit card sales every single day their business is open to public transaction. While there are many advantages for a business considering this financing option the associated negatives and risk elements cannot be ignored.
For small businesses particularly, there is always pressure on working capital and more so during the initial years. More investment into the business often brings more revenues and therefore additional profits. Most business owners have limited access to owned capital and this necessitates assistance from the lending community in the form of business cash advance loan and similar products.
Traditional lending institutions often fight shy of extending a business cash advance loan and even when they do there is voluminous paper work and long wait before the business can physically utilize the cash. Often times, the delay in processing the loan papers is detrimental to the interests of the business. Merchant cash advance providers on the other hand are quick with the processing and business can expect cash in their account in about a week at best. The repayment of a business cash advance loan is conveniently scheduled as a percentage of credit card sales on weekly/monthly basis. Therefore, if the sales dip due to seasonal factors the business is not under undue pressure to meet the repayment commitments.
A business cash advance loan provided by private lenders do not require collateral while most banks would insist on collateral. The payback period is flexible and even on the face of seasonal imbalances or contingencies, the lenders do not force a legal action on the business until all other options have been explored. Under the qualifying requirements, business owners will be required to provide a guaranteed lease of the premises for at least another year and records pertaining to credit card transactions.