Small businesses may often find themselves in a situation where they need a cash advance as an alternative to a small-business loan. They may need some ready cash for a special promotion, project or a marketing campaign and may not be able to undergo the many hurdles that are required for a small-business loan. These can include an approval process which could be rather lengthy, filling out extensive paperwork, providing personal guarantees for security and potential restrictions with regard to how the money for the loan is to be used.
Cash advances for small businesses usually offer a process which is very streamlined and require a one-page application which can be filled out at a financial institution or completed online. The applications also usually does not require providing business financials or tax returns, which can add to the time for completing the application. Businesses typically also do not need to provide evidence of collateral for the cash advance which can also increase the risk for businesses with regard to the funds.
Approvals for a cash advance are also usually granted within a 24-hour period so a business can have immediate access to funds for working capital. The funds themselves are transferred to the bank of a business within less than a week.
Small businesses may require a cash advance for a special promotion, project or a marketing campaign and may not be able to undergo the many hurdles that are required for a small-business loan.
CC image courtesy of .::HiMU::.
Further benefits of a business cash advance are that funds as low as $2,500 and as high as $500,000 can be obtained. This means that if a business is in a temporary bind to secure funds for a specific project or endeavour and needs only a few thousand dollars this money can be secured without all the restrictions that a small-business loan would require for the same amount of money. In addition, a cash advance is often accompanied by a more flexible repayment process that can be tied to the future sales or income of a business, so that the re-payment of the cash advance can be adjusted to the ebb and flow of a business’s income.
Businesses that suffer from poor credit histories or have been through some difficult times are good candidates for a cash advance. As financials and tax returns are not required to secure a cash advance, many financial institutions and other types of financial organizations are willing to provide funds for those businesses that are in these situations and are willing to work with them to help restore their financial standing.
The long and narrow of it is that cash advance loans are a great option for small companies to get their hands onto. It is amazing that a small amount of cash borrowed, can easily be turned into huge profits when you have a carefully thought-out business plan.
Ben Chifley is a freelance writer for business loans site Alternative Business Loans which provides financing to small and medium size businesses.