Business Cash Advances vs. Unsecured Small Business Loans

Business Cash Advance

Today we will be comparing business cash advances to unsecured small business loans. Although both of these loan types are not backed by any specific asset in the way that secured loans are there are some very important differences between the two which we will outline today.

Cost: first is the issue cost. Business cash advances are by far the more expensive of these two options. Interest rates can sometimes be as high as the high double digits letter often more in the 10 to 20% range. They are definitely more expensive in general however. Unsecured small business loans although not as inexpensive as secured loans will typically have much lower interest usually less than 15%.

Approval: the requirements to get approved for business advances are much less stringent than for an unsecured small business loan. Unsecured loans will typically require you to demonstrate positive credit history, well-established revenue and low costs. Advances on the other hand will typically only look at your last six months of revenue when determining whether or not to authorize a loan.

Time to Obtain Funding: partially due to the less strict requirements for approval and also due to the somewhat more limited amount of funding cash advances are much faster to obtain then unsecured loans. Although unsecured loans through nontraditional lenders can be funded in as little as a week they typically take between 10 to 15 days from application to disbursement. On the other hand an advance can be funded in as little as 72 hours assuming that you submit all required paperwork quickly.

Lenders: There are different types of lenders which will generate both of these loan types. Traditional banks do not deal directly with business cash advances as a rule of thumb but they may in fact owned subsidiaries that do. This is because they want to differentiate themselves from high interest low value lenders. Unsecured small business loans on the other hand run the gambit when it comes to lenders. All lenders from nontraditional niche lenders up to and including large-scale traditional banks will offer loans of this type. Which type you get will depend largely on your personal circumstances and qualifications.

As you can see although there are some similarities between business cash advances and unsecured loans there are also many differences. They both fit me same basic need of funding your company but do so in a very different way.

For more information, go to business cash advances at

Business Cash Advances vs. Unsecured Small Business Loans was last modified: September 30th, 2011 by Amit Kraidman
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One Response to Business Cash Advances vs. Unsecured Small Business Loans

  1. Jady says:

    With the bases leaodd you struck us out with that answer!