Is a Small Business Cash Advance an Option for Your Company?
Today’s small business no longer has to rely on a bank as their only source for funding. Now there are specialty financial lenders that offer alternatives to the standard loan, such as a small business cash advance. Cash advances work differently than a traditional small business loan. This is because the business owner is approved faster and receives their funding much quicker than going through lengthy bank loan process. Accessibility to funding has never been simpler for small business owners, but is small business cash advance an option for your company?
What Type of Companies Qualify
Cash advances are typically offered to companies looking to sustain their business, not startup companies. Most lenders will require a minimum length of operation, typically at least 6 months to 1 year. The business’s average monthly sales in also taken into consideration.
Advance lending companies each have their own requirements to receive fast funding. Typically the business owner will not have to provide the amount of documentation necessary when applying for a small business loan through a bank.
Protect the Assets with No Collateral
A bank will require that assets be offered as collateral in exchange to receive funding. Your small business may not have the necessary assets to offer to the bank, or you may be uncomfortable with the idea of risking your assets. Did you know that business cash advance lenders do not require collateral? You’ve worked hard and invested your resources to build your business to the level that it is today, don’t risk your assets.
The goal of cash advance is for your business to sustain its financial future, not risk it. For this reason, the small business cash advance is a favorable option for small businesses meeting the length of operation and sales requirements
Small Business Funding With Poor Credit
For businesses or business owners with poor credit, a bank will most likely reject a small business loan proposal. Luckily for those with credit issues, a business cash advance is still an option. When these specialty financial lenders receive a cash advance inquiry, credit scores are not as heavily weighted in the decision process.
For business owners who fear rejection or are unable to secure a small business loan for working capital, it is time to consider a small business advance.
Using Funds to Grow Your Business
After receiving the funding, your business will have the flexibility to use the small business cash advance for any expenses necessary you sustain your business. You may use the funding received for advertising, expansion, debt reduction, tax payments, and more. This will permit your small business to grow now, not later.
The Risks of Small Business Advance
As with any funding option, risks are involved. In exchange for fast funding, small business cash advances typically have a slightly higher interest rate than traditional bank loans. However, most advances will have flexible repayment plans better suited for small businesses. Instead of paying back a large sum all at once, the lender will ask for smaller increments to be deducted from the business’s bank account.
When agreeing to the contract for small business funding via a cash advance, be sure to carefully evaluate the contract. The agreement will contain a list of contingencies for your business. To prevent a breach of contract and avoid penalties, be sure to follow the contingencies.
How Much Funding Can You Small Business Receive?
With CFG Merchant Solutions, each business applying for everyday working capital is unique. We determine how much funding a business will receive through a variety of different factors. CFG Merchant Solutions is a privately owned and operated specialty finance and alternative funding platform. Our goal is to focus on providing capital access to small and mid-sized businesses.
Contact us today to find out how much your business can receive!