What options are available for businesses other than traditional Business Loans? On the surface, this may sound like an odd question, but if you happen to be a small business owner or you broach the topic of financing with someone who is, you’ll quickly discover just how relevant it is. For people in this position, a Business Cash Advance is far and away the best option for obtaining capital without extensive strings attached.
Banks like to talk up the fact that they’re business-friendly, but the reality is this fondness for dealing with corporate clients is largely reserved for customers with multimillion dollar operations that have massive cash flow and a wealth of assets to minimize risk. A smaller business owner will quickly discover that most banks are not interested in offering unsecured business loans, meaning that their personal assets are on the line as collateral. That’s assuming the applicant makes it through the reams of paperwork, extended underwriting process that can drag on and the potential for application fees. Their personal credit rating is the basis for the bank’s decision -not the performance of their business- so those business owners who have a less than perfect personal credit rating need not apply for Small Business Loans. Assuming the business owner successfully navigates the bureaucratic maze and satisfies all the lending criteria they may then find that Small Business Loans can come with strings attached; the bank may want a say in determining how the money it lends is spent, effectively undermining the flexibility that makes small business ownership so attractive in the first place. Repayment terms are also fixed, allowing no leeway should a slow month make meeting a set monthly loan payment difficult.
This is where a compelling alternative to the mythical unsecured business loans comes into play. So long as a company is generating monthly sales by credit card, an alternative lending company like Rapid Capital Funding offers a product known as a Business Cash Advance, or Merchant Cash Advance.
Designed specifically to fill the void where traditional Business Loans typically fail small business owners, a Business Cash Advance is based on repayment taking the form of a small percentage of the monthly credit card sales generated by a company; if sales are slow during a given month, the payment drops accordingly, reducing financial stress. The application process is much more straightforward, with no hidden fees, quick turnaround time (funds are often available within seven days) and an approval rate that exceeds ninety percent. Although it’s not a loan in the traditional sense, this product provides what people think of when they mention unsecured business loans, because there is no collateral required and personal credit ratings are not a factor in obtaining the financing.
Finally, unlike most Small Business Loans, a Business Cash advance gives the business owner complete flexibility to spend the money as they see fit, whether its expansion opportunities, new equipment or even covering operating expanses during a slow sales cycle.
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