Cash Advance: A Lending Option for All Seasons

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The National Small Business Association (NSBA) says over 58% of its members were hit hard by the economic meltdown of 2007/2008.  A study done in 2012 discovered the reason for most bankruptcies was cash flow problems.

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During this period Small Business Development Centre (SBDC) says over 76% of businesses had debts. The U.S Small Business Administration (SBA) adds that banks reduced lending by a whopping 79-83% to most small enterprises. From the figures it is obvious that most businesses need an alternative source of funding and this is where cash advances came in handy.

Banking on New Frontiers

First things first; there is no denying that getting a loan from your bank when you have a bad credit report or no collateral is a hard nut to crack. In fact, it is nigh impossible but today the Small Business Finance Association (SBFA) says alternative financing uptake has increased by over 60%.

Top among these other financial solutions is of course the now ubiquitous business loan advances otherwise called merchant loans.  While the term ‘loan’ might give an implication that you are getting the same assistance a bank would give you these two financing options have nothing in common.

For starters, you get to enjoy a customized financing package that suits your situation best. In addition, these companies fund you based on your merchant account statements meaning there is no risk of over-borrowing which is a trap that most entrepreneurs fall into. Moreover, you get cash approval in a short time say 48 hours to enable you sort your cash flow problem promptly.

Leveraging Versatility of Business Advance Financing

While there are myriad benefits of applying for cash advances, one of the most prominent is the versatility of this alternative.  Most banks who might offer to fund you will take total control of the way you use this money.

The freedom to utilize your money is one of the best things about this financing option.  These lenders understand that every business is unique and as such, you will not have a one-fit-it all package. Some of the applications to which funds can be put to include:

  • Equipment purchase: If you need to buy more equipment to run your operations when funds are low there is no better way to fund this venture. You are guaranteed that the ROI will offset the advance and any interest accruing.
  • Late payments: If suppliers are on your neck, it can ruin your business and if a solution doesn’t come quickly everything might sink. By getting a quick advance from a reputable company you will avert a situation where you are under stocked as this can greatly impact on customer loyalty.
  • Support operation costs: Your business requires liquid cash to push it through low season and without good revenue coming in this can be tricky. Quick financing without a lot of strings helps avert a lockdown.

There are many other situations where this money can be applied to in your business to keep you going. Whether you want to expand, market your business or any finance any other project that will prop your business this is a lending option that suits all needs.

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Cash Advance: A Lending Option for All Seasons, Seekyt
General Contributor
Janice is a writer from Chicago, IL. She created the "simple living as told by me" newsletter with more than 12,000 subscribers about Living Better and is a founder of Seekyt.