Business cash advance is one of the easiest ways to maintain a healthy cash flow and meet the necessary cash availability for the day-to-day business activities. It is a relatively new method of financing your short-term cash needs compared to business loans, however it is much safer and easier on the purse from a borrower’s perspective.
While many people are quite apprehensive about business cash advance companies and have a pre-conceived notion that they are just the same old loan sharks in a new disguise, the fact is that business cash advance and business loans are totally different.
With business loans comes the liability of repaying back according to predetermined schedule, there is always a risk of defaulting and the fear of losing your credit score. However, business cash advance is a much easier process and the repayment is done through Visa or Master card sales receipts. Payments received through Visa and Master cards are accounted for repaying the cash advance amount and no other sales proceeds are involved. This helps the borrower to repay the business cash advance easily while maintaining a steady income through other sales receipts.
Not just repayment is easy with business cash advance but it is also easier to get a business cash advance compared to a small business loan. While to get a business loan the borrower would have to go through a lot of documentation and will also probably require some suitable collateral, getting a business cash advance is much easier. The paperwork is comparatively less and the cash advances are approved comparatively faster. Also, while some companies would ask for collateral most companies would not require any collateral to offer a business cash advance.
The biggest advantage that business cash advance has over a traditional business loan is that the borrower is not personally liable to repay a cash advance. In case of a business loan the borrower is personally liable and if the borrower is unable to repay the loans there is always a risk of losing personal assets that are often being used as a collateral. For business cash advance the repayment is done through credit card sales receipt and the borrower’s personal assets remain untouched.
Business cash advance has gained acceptance among small business entrepreneurs and is trend shows an increasing popularity over the last few years. This is further more expedited by the continuous advertisements done by the cash advance companies through all possible media. Given the host of advantages and the aggressive marketing technique of the cash advance companies it can be safely said that business cash advance is going to be financing method of choice for most small business entrepreneurs in the years to come.