If you own a company you may occasionally run into emergencies. So what do you do to pay for these emergencies? You could try to borrow money from friends and family, but that certainly comes with its own set of problems, and many prefer not to do this. If you’ve run through your petty cash and you require additional funds an advance may be a good choice. But, what is the business cash advance process? We will be discussing that in today’s article.
Credit: Surprisingly credit is not a major factor for you or your company in getting an advance. The business cash advance process is designed to be streamlined as much as possible and the requirements are not very strict. This means that you will likely not need a high business credit score or any type of business credit score at all. This can come in handy if you’ve only been in business for a short time and have been running most of your expenses through your personal credit.
Requirements: So if credit isn’t one of the requirements what are typical requirements for an advance? In most cases all you will need to demonstrate is consistent revenue over the last 6 months. You may not even need to provide further historical documents, depending on your current finances.
Time: One of the big advantages, and really the only reason to get one, is the speed at which you can obtain funds. If you respond to all requests for information immediately it is not impossible to move from application to cash in hand in under 5 days. Traditional bank loans can take weeks to get approved and funded. If you are paying for an emergency, and like I said you should only use these for emergencies, you can get the money you need very quickly with this method.
Cost: Like with all things there is a downside to getting and advance and that is cost. The interest rate as seen from a yearly basis is very high often high double digits. Remember you are meant to pay of these loans in 90 days or less and not keep paying for them over a long period of time. But, even considering that they are not cheap, so make sure you are using them as sparingly as possible.