If you run a small business you will run into different types of funding needs. There are planned for needs, like business expansion, changing offices, upgrading equipment, etc. For those types of needs venture capital or traditional bank loans are a great fit. Then there are emergency needs, like theft of equipment, flood damage, broken equipment critical to your operations, etc. For these types of needs where you are literally losing money every day the problem isn’t fixed, a small business cash advance may be a good option. We will be discussing the small business cash advance process in today’s article. We will try to provide a working overview that you can follow to help you on your way.
First thing to understand, it is not necessary to demonstrate a long business history of credit in order to get can advance. The small business cash advance process is designed to give out loans very quickly, which are paid back almost as quickly. This drives two forces; the first that time is of the essence and that lengthy processes take time that you simply don’t have, the second is that the requirements to get approved tend to be much more lenient. Why more lenient? Because you will be paying back the loan very quickly, and they aren’t going to lend you more than a small amount, typically no more than 60 days revenue. So, how do these companies offset their risk if they aren’t doing much to guarantee you are a good bet? They do it by charging much higher than industry average interest.
So how high is the interest on an advance? It varies a great deal from lender to lender, and on this note I recommend you shop around quite a bit for the best rate, but it is typically very high. It is not uncommon to see rates in the high double digits. So keep this in mind when exploring this option. This may not be a major factor if the equipment that is out of commission generates huge profits for you. Picture you are a coffee shop and your main workhorse espresso machine breaks unexpectedly? Would you mind paying 30% interest to repair this, could you afford not to?
So the small business cash advance process is fast but very expensive. You don’t need to show much in way of history but you pay for this in interest. You can get advances online very easily with a quick Google search.