Benefits Of Cash Advances For Small Businesses

Cash advance is non-collateral kind of loan offered to businesses by financial institutions to help them meet urgent cash flow demands in their day to day operations. This means it does not need any security to be extended by the provider. Cash advance is offered against expected credit card sales at a discount. In essence, a business receives cash as a percentage of future credit sales. These loans are convenient than the ordinary ones which require security in the form of properties ownership documents such as land title deed, motor vehicle log book, insurance policies documents and stocks ownership documents. The following are five benefits of cash advances for small businesses as a way of obtaining finances for daily operations.

Benefits of cash benefits for small businesses

Collateral is not necessary

dsfsdfdsfsdfsdfThe business does not need to have any of its assets attached by the lending institution as collateral against cash advance. Future credit card sales act as the security that is enough to be lent the cash advance. The cash advanced is a small percentage of the future credit sales. This acts as a cushion against the total credit sales not being settled by the debtors. Small businesses that lack high-value assets to act as collateral against loan are not disadvantaged. They can compete with other large business entities that have valuable assets that they can pledge as security against loans.

Flexible repayment terms

The periodical repayment amount agreed between the lender, and the business is usually a fixed fraction of future credit sales. Sales frequently vary from month to month. The amount to pay back as cash advance will, in the same way, vary from one month to another.

The varying of repayment amount with monthly sales ensure fewer amounts are paid during low seasons, and more amounts are paid during high seasons. This is unlike the loans that are usually a fixed figure irrespective of the sales. Loan repayment may put pressure on an already stressed business due to financial constraints. For this reason, cash advance has a great benefit to small businesses.

Catalyst for higher sales

hgfghfghgfhgfA cash advance can be obtained to finance huge orders that a small business could otherwise not get funds for. The business will get cash equivalent to a certain fraction of the expected credit sale and utilize it in servicing the big orders hence increasing its sales. This enables the business to remain stable, generate more revenue and even unlock some locked up potential that could not have been utilized. The business is also able to compete with its rivals and not lose present and future opportunities for failure to deliver substantially.

Ease of obtaining

The providers of cash advance consider only the monthly credit sales and the period over which the business has been in existence to offer it. These are quite simple and direct parameters making the application procedure easy and convenient. Normal loans usually have complex application procedures and require many documents. Many small businesses would not qualify for the traditional loans. However, the ease of applying and obtaining cash advance that is very convenient for small businesses enable many small business access funding.


Ways to get financing for your business

Finance is the pillar that every business is built upon. To make sure that you get the most out of your investments, you need to properly fund it to make sure that it takes off successfully and can maintain itself until it starts making profits. It is very important that you can finance your endeavor, especially if it is a business. There are various ways to get financing, and we will be looking at them in this post, make sure that you take all of them into consideration.

Some ways to finance your business


The best way to finance your business is to do it from your pocket; this will enable you to get the most out of your business because you will be paying yourself. To make sure that you do not strain your finances, it is better to save forĀ it. You can open a savings account to ensure that you explicitly save for your business.

Borrow from friends and family

Another viable step that you can take is to borrow from your friends and relatives. If your business plan is robust and sure to make returns, most friends and family members will not hesitate to help you out. Given that you will not be paying back with interest ensure that you pay them back in time, as a way to appreciate their efforts.

Get a bank loan

When all other avenues seem impossible, visit your local bank, and inquire if you can get a loan to help you fund your business. Bank loans are official and to make sure that you get the loans, you have to prove yourself to be competent by having all the relevant paperwork, do your homework on the requirements and have a solid business plan.

Microfinance groups

Sometimes, banks are too expensive, regarding loan repayment. The next best way to go for is microfinance, to ensure that you are well funded. Most will require you to be a part of them, and as a result, you will have to save them for a while before you can access loans to fund your business.

Crowd funding

If your idea is revolutionary, you will have a better chance of financing it through crowd funding. Technology has brought about a lot of improvements, and one of them is enabling people to fund their ideas over the internet. All you have to do is make a prototype, shoot a high-quality video explaining how it works, and come up with a crowd funding strategy. You can use sites such as IndieGoGo to get the best crowd funding.