If you have a small business,What Is a Small Business Cash Advance? Articles you may find yourself struggling to make ends meet. The sad fact is that the current economic crisis has put an incredible strain on a number of small businesses. Many of these businesses have gone under and many more are just managing to avoid that fate. One unexpected expense may be enough to do irreparable damage to a number of different small businesses. If you are in such a state, you might want to think about getting a small business cash advance.
Of course, most business owners who are in need of additional money often immediately think about getting a small business loan rather than a small business cash advance. However, getting a conventional small business loan may not be so easy in this day and age. For one thing, many conventional lenders are aware of that many small businesses are having a lot of difficulty. Rather than making them managed service provider eager to loan these struggling businesses money, this in fact makes a lot of banks reticent to make such loans. These lenders fear that they are taking a very real risk that their money may never be repaid if they make a loan to a small business.
Those lenders who are willing to still make conventional small business loans often have a laundry list of qualifications that must be met before they will make such a loan. Lenders can look at how much money a business is expected to bring in because this will affect the business’ ability to repay the loan. They can look at how long the enterprise has been in business. They can even look at the credit rating of the owners of the small business. As you can see, these criteria may make it difficult for a business that has had a slump in profits or for a business that has not been open long to qualify for a conventional loan. However, this criteria is not usually an issue with a small business cash advance.
A small business cash advance is different from a loan because the small business typically does not repay the loan back to the lender themselves. Instead, the advance is often made based on the credit card sales done by a business. For example, organizations that make these cash advances often take a look to see how much money a business brings in each month from credit card sales. If the business does the required amount of credit card sales, then the organization will typically forward them a certain amount of cash. Once this is done, the organization is then directly paid a certain percentage of each credit card sale by the credit card company. Since repayment is not predicated on the owner being able to repay the loan in the conventional manner, the owner’s credit history normally has little to no impact on getting a small business cash advance. These advances can be extremely useful for businesses that otherwise would not qualify for a loan.