BUSINESS CASH ADVANCES
Business cash advance loans refer to working capital obtained by selling future credit card receivable. It is a source of financing small businesses that face cash flow financial problems and are not able to access a loan from a bank due to restricted and limited liquid assets.
How it works
When an organization gets the business cash advances the deal is all about the purchase and the sales obtained from selling credit card receivable. There is no fixed money put in place that is needed in an organization. The lender does the work of collecting the amount of money that is targeted by the company and the collection goes on up to the point where the target is reached. The lender mostly does this work within one year. They want to ensure that they get the best interest returns without locking in the advance given, for a long period of time. Hence, they prefer to deal in short term advances.
The advantage of business cash advances is, when they make few sales, their payment for that month to an organization or company is relatively lower, because of the set amount of credit card sales collected, making many organizations to get attracted to it. It’s a win-win situation for both and this is a very common practice in the business and credit marketplace.
Another advantage is there is usually no set date for the cash advances to be paid out.
How they can help if the borrower has poor credit.
The organization that offers this business cash advances, including banks, will require a big amount of collateral in the form of receivables or property for use as collateral that could be seized in case a default occurs. Borrowers with poor credit can still apply for the money they want to use in their businesses and receive it in less than 48 hours. That is the primary reason why small business owners opt for private, unregulated credit financing as they are not concerned with the credit history of the borrower.
The companies that offer the business cash advances recognize the importance of our small business clients to their communities and help them to run their businesses efficiently with the cash they borrow despite their poor credit. They aim to create a relationship with their clients in order to assist them financially whenever they need to fund projects that would be outside their financial reach.