Business Cash Advances A New Way To Finance
There are a number of routes to get working capital for your business, however, not all of them involve a normal loan. Business cash advances are actually a form of factoring. Factoring is a method whereby a business sells a portion of its future credit card sales to a factoring company – the factor – at a cheaper rate in exchange for financing with which to fund the business as soon as possible.
In today’s economic climate, it is no secret that a large number of new companies are having a very hard time obtaining normal business loans through a bank. The banks are overly tight when it comes to their working capital at the moment. Fortunately, business cash advances via factoring arrangements are always obtainable and the conditions for qualification are much less stringent than those received at a local bank.
To obtain a business cash advance, many factoring companies like to see a company to have been in business for as little as a year and processing credit cards for at least six months. Since repayment of the advance is simply tied to credit and debit card receipts, evidence of such transactions is also necessary.
A portion of these future credit card sales is agreed upon as the daily repayment capture, simplifying the financial hardship for the company in a slow period. Contrary to a traditional small business loan, the daily capture aspect of a business cash advance provides business owners with the ability to return the funds at a convenient pace instead of being liable for set monthly payments that will lead to the business go out of business.
Because this working capital is not secured in a standard loan, if the merchant fails to meet the stipulations of the agreement, for example, using different merchant accounts to process payments, they are still held personally liable for the balance of the advance.
However, for a large number of struggling establishments, this method of obtaining funds is still convenient. Flexible remittance terms, quick access to crucial funds and simple attainment of said financing, makes business cash advances a reasonable option for many entrepreneurs.
For many years, Daniel Samoohi has served as a reputable source of information regarding Business Cash Advances. For honest answers and guidance on Business Cash Advances visit him at Merchant Cash Finder.
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