Financial Lifeline for SMEs: Acquiring Business Cash Advances and Business Loans

Small business owners deserve to have a chance to compete for their share of the consumer market too. Unfortunately, funding is usually a challenge for them. Even with enough capital to set up the business, running the day-to-day operations and eventually expanding in some way could sometimes require another round of funding. Business owners can raise funds by acquiring business cash advances and business loans.

Cash Advances for Businesses

These loans are granted because of the company’s projected receivables. The approval time is generally short and the requirements easy to comply with. As the loan repayments would depend on the company’s cash flow, the borrower usually requires the loan applicant to show what his cash flow looks like. The business owner would also have to submit copies of his most recent bank statements.

The term of business cash advance loans varies because the repayments are taken as a percentage of daily credit card sales or payments. The interest rate for this type of loan is also on the steep side. Consider the APR vis-à-vis the revenue impact of the loaned capital. If the additional capital is not going to bring in enough money to cover repayments, perhaps another option should be considered. 

Business Loans

These short term loans have fixed repayment terms and lower interest rates than business cash advances. Lenders usually require more documents to show proof that the business loan applicant is legitimate. Loan applicants will be asked to submit incorporation/proprietorship documents, business permits and licenses, statement of assets, liabilities, and cash flow, and bank statements among others.

These loans have fixed maturity dates and are repaid in fixed monthly amounts. The lower interest rates make them a wiser choice for business owners who do not mind the longer list of requirements and the stricter credit procedure.

Borrowing for Growth

Acquiring business cash advances and business loans allows small companies, startups to continue operating and serving their customers despite their lack of financial resources. The right lender can be their partner towards achieving their business goals.

Be the first to comment

Leave a Reply

Your email address will not be published.