Cash Advance - Quick Cash Solutions for Your Business!

By: Jennifer Salerno

A cash advance is an oft heard term these days. However, it is also a widely misunderstood term. We know it as something that can help a business with financial needs, but we are not sure about how exactly it can do so. Most of us look upon it as a kind of loan. Others are unsure about how to qualify for receiving a cash advance. Let's take a closer look at cash advance and try to understand how it works.

Anybody running a business would agree to the fact that a business may sometimes fall in need of ready funds. When such a need arises, it is usually of a critical and urgent nature. In some extreme cases, the survival of the business itself depends on the quick availability of funds. In other cases, it could a case of continuing operations on an uninterrupted basis. Whatever be the case, the need is immediate and cannot be ignored. The needs could indeed be varied, such as advertising and promotional costs, debt consolidation, cash flow, adding to inventory or purchasing new equipment, business expansion or remodeling, payroll and so on. To help a business realize these goals, one needs to have some ready cash. A business cash advance can act as a veritable godsend under such circumstances.

Let's try to look further into how a cash advance works. The amount to be given to a business as cash advance is dependant on the average monthly Credit Card sales and the merchant's need for capital. It can also be based on the average credit card volume and the past business history. These days, however, the process of securing a cash advance for your business has become a lot simpler than ever. Most financial bodies offering such advances require a business to comply with just a few simple norms in order to put their seal of approval on its application. These include being in the restaurant, service or retail business for an appreciable length of time (like 9 months or more), having a moderately good to excellent personal and business credit history, no open tax liens, judgments or bankruptcies and the like.

All said and done, the most important prerequisite for obtaining a cash advance is having an operational merchant account. In other words, the business must be accepting credit cards as a form of payment. This is because repayment of a business cash advance is closely linked with the credit card transaction of the business. This is the beauty of the process. A cash advance never ties down the borrower to the liabilities of a fixed repayment schedule. Instead, the repayment is done from credit card sales receipts and the business never feels the pinch. This is an agreeable departure from the working capital loans which require a fixed repayment schedule. If the borrower fails to repay the working capital loan according to this schedule, it might affect his credit score and he also stands the chance of losing his collateral. With a cash advance, such chances are remote.

So the next time your business faces a need for cash, consider taking out a . Most lending authorities will provide the requisite financial assistance without any upfront fees or closing costs, any collaterals and all these in very little time.


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