After suffering from the effects of a poor economy for the past several years, many businesses are low on cash. In order to survive the recession, such a business may have utilized every resource at its disposal, which often results in a negative credit history. Those businesses that made it through this difficult time are typically left with very few options for obtaining extra cash when they need it for unexpected expenses, such as the cost of replacing equipment. In addition, lenders are wary of struggling businesses and aren’t usually willing to offer them business loans. Fortunately, there is another way to improve a business’s cash flow.
Business Cash Advances
A cash advance loan made to a business is similar to a payday loan made to an individual. A business can qualify for this type of loan regardless of its credit history, and the loan does not require any pledge of collateral. The cash is also made available to the business very quickly. Unlike traditional business loans, however, business cash advance loans are intended to be used only for short-term cash flow needs. The interest rate on a business cash advance loan is typically a lot higher than the interest rate offered on a standard bank loan. Businesses are usually permitted to pay the cash advance loan back in small installments, but the high interest rate causes the loan to become more and more expensive as time goes on.
A business can qualify for a cash advance loan only if it is an established company. Businesses in start-up mode cannot usually obtain this type of loan. In addition, a business applying for a cash advance loan must show proof of its total monthly income before the application will be approved. If a business had a strong credit history and access to a line of credit or a traditional bank loan, a cash advance loan may not be the best choice. However, for a business with no other financing options, cash advance loans are a good way to obtain some extra cash.
For more information about cash advance loans for businesses, consult this article.
For more information, go to Business Cash Advance at http://www.unsecuredbizloan.com/business-cash-advance