Cash Advance – everything you need to know
When it comes to keeping your business running smoothly, there’s no substitute for having the necessary funds on hand. A business cash advance is a great way to make sure you have the money you need.
What is a business cash advance?
A business cash advance is a type of financing that allows business owners to receive a lump-sum amount of money in exchange for a portion of the business’s future revenues. A lender or financial institution usually provides this type of financing and it typically serves short–term financing needs. Covering expenses during a slow period or paying for unexpected costs are some uses for it.
Rather than borrowing a traditional loan, business owners typically receive a cash advance in exchange for a percentage of their future sales. The business pays back the advanced amount by giving the lender a predetermined amount of money from its future sales. This repayment amount is usually fixed, which means that it does not change as the business’s sales fluctuate.
Businesses often use cash advances as a fast and convenient way to access capital when traditional financing isn‘t available. They’re also beneficial because they typically have less stringent requirements than traditional loan applications, but they often have higher interest rates. Additionally, the repayment amount is typically based on sales, meaning that businesses may have to pay more if their sales are higher than expected.
Who is it for?
A business cash advance is a form of financing that allows businesses to receive an advance on their future income. This form of financing is often used by small businesses that may not qualify for other forms of financing. It is a short-term solution that provides businesses with quick access to cash. Business cash advances are typically repaid in a lump sum payment that includes the original advance amount plus a fee. The fee is typically a percentage of the advance amount, such as 15-20%. The repayment term is often quite short, ranging from a few weeks to a few months.
Businesses typically use cash advances for business expansion, marketing efforts, inventory purchases, and more. Businesses must meet certain criteria to qualify for a business cash advance, including a minimum monthly revenue, a minimum time in business, and a minimum credit score. Businesses must also demonstrate that they have the ability to generate enough revenue to cover the advance and fees.
How does it work?
A business cash advance is an alternative form of financing that allows businesses to receive a lump sum of cash in exchange for a portion of their future credit card sales. Merchant services providers typically offer this kind of financing, ideal for small businesses that have difficulty obtaining traditional bank loans.
Here’s how it works: Merchants apply for a cash advance, and then the lender will review the merchant’s credit card sales. Based on the amount of credit card sales, the lender will offer the merchant a lump sum of cash. The merchant will sign an agreement stating that the lender will have access to a portion of future credit card sales. The merchant will then receive the lump sum of cash. The cash can be used for any business purpose, such as purchasing inventory, investing in new equipment, or expanding the business.
The lender will receive the portion of the merchant‘s future credit card sales that was agreed upon when they are processed. The lender will deposit the remaining amount into the merchant‘s bank account after deducting their fees.
Business cash advances can be a great option for businesses that have difficulty obtaining traditional bank loans. However, they can also be costly, as they usually come with high fees and interest rates. It is important for businesses to understand the terms of the agreement before applying for a cash advance.
How does All Business Solutions do it?
A lending specialist will work with you to customize the best advance for your business. Funding is available directly to your account in 36 hours or less.
We offer low initial rates and add loyalty discounts to get you the most value over time. After paying back 50% of your advance, we establish a working relationship and we may offer more capital as needed.
Extending the term and making repayment sustainable is a cornerstone of our model. We believe repayment shouldn’t be a source of anxiety, but a manageable mutually beneficial arrangement.
With All Business Solutions, you don’t have to climb mountains of paperwork to get the working capital you need. Simply submit our one-page application along with minimal revenue documentation. One of our lending specialists will get back to you within 24 hours with a no-obligation offer.
We don’t believe that a cash advance is a replacement for other traditional types of business funding. However, it is a crucial component of overall cash flow solutions. If you choose us as your partner, we are happy to help you secure additional financing sources. We will guide you through the application process for other business loan products in our partner network.