|
Apply Now For A Business Cash Advance Quote Then Choose the Best Offer
In today’s world where the economy is unstable and is showing a downward trend the possibilities of getting a loan for your business is extremely difficult. Most banks and financial institutions first ask you to fill out numerous forms, then submit a list of documents and then reject your offer because your business is too small or your credit rating not too good. So, how do you get out of this rut and progress in your business? There has to be an answer because there is always a way out. Well, in this case the answer to your problem is Business Cash Advance.
Let us first understand what a business cash advance really is. A business cash advance is provided by a number of merchants and this concept has been around for more than 10 years but only got really popular among businessmen and small entrepreneurs about two years ago when the economic meltdown begun. These merchants provide you with the amount of money you need to invest in your business in really quick time and all you need to do are just fill a form, submit a few documents and pick your cash.
Like any other loan to get this cash advance you and your business have to qualify and the basic qualification that is required by most merchants are that your business accepts credit cards as a mode of payment from your customers, you do business of a minimum of $2500 sales on your Master Card and/or VISA sales and this is not really important, that you have a personal or business credit card. Also, your repayment options are flexible and the merchant doesn’t secure any of your things for the loan. Usually, you fill the form and the money is deposited in your bank account within a day.
Like the name suggests, this is not a loan but a cash advance and the repayment method is a little different. The cash you receive is actually an advance from the merchant for a part of the sales that you will make in the future.
Although it all looks very enticing, there are a few drawbacks. One of the most prominent is the high interest rate that is charged by these merchants for the instant access to cash when you are in need, the interest rate on these cash advances can go up to 30% on the cash advance received. Another factor is that the cash advances are usually not very big amounts however, this is changing very quickly as a lot of merchants are now giving out up to $300,000 as cash advance.
One key factor that is missed by many and which puts them in trouble is that as the cash advance is repaid by sales made by the business then, it is important to consider what the sales margin of the business is. For e.g. if there is a less than 10% sales margin in the business then taking a cash advance is definitely not a very good idea.
|
