Business Financing With Cash Advance

By: Alfred Anderson

The most critical decision for any small business is to find the right source of financing. The market offers a host of financing solutions, enough to confuse an entrepreneur. The nature of business funding depends on the nature of business and thus a thorough understanding of various funding avenues is of prime importance for any entrepreneur.

One of the most common forms of financing is to seek it from friends and family. Not only are they less stringent as per the norms but also are less expensive by way of repayment interest. However, a lot depends on the kind of relation a person has with his friends and family members. Irregular repayments and asking for further financial assistance might lead to a feud that can have an adverse effect on the relationship.

Bank loans are another popular method of financing a small business concern.

These loans are available in various formats and have fairly stringent guidelines. A loan can be available in the form of secured or unsecured loan. A secured loan is the one that requires a collateral/ security for the loan to be sanctioned. In the event of non-repayment, the bank gains the right to sell that collateral and recover the amount. On the contrary, an unsecured loan does not need any security. However, the interest rates are typically higher than that of secured loans. Apart from these the guidelines set by the bank, loans are often very stringent to comply with. A good credit score is an important parameter that determines the eligibility of an applicant. These loans are easier to sanction only if an applicant has the backing of assets or third party guarantors. Thus, a small business concern might find it difficult to get the required loan amount sanctioned from a bank.

A is by far the best method of funding a small business. Neither do they need a credit score nor do they have a stringent repayment scheme. Besides, the eligibility criteria are fairly easier to comply with. A small business needs to be at least two years old and should accept credit cards as a form of payment. Apart from that the business should ideally process a minimum amount of payments per month and should provide the credit card statements and bank statements for the last three months or so. The best part of a business cash advance is that the borrower does not have to bother about the repayments every month since the amount is repaid automatically from the credit card sales.

Money Management
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