Running your own business is always a challenging job and the challenge becomes even more difficult when there is a fund crisis. Every business, small or big has experienced this situation where you need immediate financing to support your daily business activities and you are running short on cash. So what are the solutions?
While effective working capital management can reduce the occurrence of such situations, it is more than likely that businesses will still have need for funds, may it be to meet the recurring expenses, buy capital equipments or to expand the existing business.
Business owners has traditionally being dependent on business loans to meet such fund requirements, however, business loans are probably the worst type of liabilities that any entrepreneur would like to shoulder. They would require a collateral, a high rate of interest and fixed payment terms – business owners often risk losing their assets that they put as collateral in case they fail to make timely payments. With all these issues making business loans a negative option for entrepreneurs sets them on a hunt for a better finance option. Business cash advance is just that!
Business cash advance is one of the most popular financing methods for businesses. Cash advance providers would buy a predetermined number of Visa and Master card receipts from business owners and provide them with business cash advance in lieu of those receipts. The amount that the seller receives is not a loan and it is a cash advance paid against the Master and Visa card receipts and is paid back through the merchant account. The borrower need not repay the amount personally.
Unsecured business cash advances are available and the business owner would not require any collateral to get an unsecured cash advance. Also the borrower is not personally liable to repay the business cash advance. The business owner can sell his future credit card receipts at a discounted rate to avail a business cash advance. This is very much similar to Factoring, except for the fact that in factoring business-to-business invoices are discounted where as in this case your credit card receivables are factored.
There are no fixed payment schedules for a business cash advance and only the credit card sales receipts are used for repayment of a business cash advance. All other payments received through cash, check or other credit cards are left with the borrower. This ensures that he has sufficient funds to run his business while the cash advance also gets repaid through the Visa and Master card receipts.
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Not only is Business cash advance an easier finance solution from repayment perspective but also it is easier to get. The general criteria required to qualify for a business cash advance are:
The business must accept Visa or Master Card as a mode of payment
The business must process a payment of $1500 or more in a month
The business should have been there for at least 2 years.
Credit card statement and bank statements for 3 month for seasonal business and 12 months statement for non-seasonal business should be available.
Most business cash advance companies would have similar conditions probably with some modifications here and there. These makes it easy for any business that accepts payments through credit cards to qualify for a business cash advance.
With this easy to get and easy to repay options, business cash advance has been the finance of choice for most business owners and especially small business owners are taking the maximum benefit of from business cash advance. If you are a small business owner, act now and get a business cash advance to take your business to the next level.