Business Cash Advance

Everyone and anyone who dreams of becoming a successful businessman always dreams of becoming the best at it. Nobody wants to become an average simply because most already are. But in this money-minded era, how is this possible that a small business can afford an easy loan that can be paid back without losing peaceful sleep in the process? Well, we assure you after reading this article you will get a good business loan and you won’t lose your peace either. Here next we are going to talk about business cash advance.

A business cash advance is unlike any other form of loan available in the market. In Business cash advance, the lender lends you money for a certain period of time (that is your deadline) before which you have to repay the sum but here is a twist, you don’t directly pay money through installments or other options. You shall pay back the loan through the sales that you have made that is, a business cash advance is directly depended on the sales of your firm. The money you pay back from time to time is directly proportional to the sales you have made.

Understanding business cash advance

Let us make you understand the concept of business cash advance with an example. Suppose that the lender lends you a sum of £1500 with an interest rate of 10% and you are given a deadline of 8 months (may not be applicable in some scenarios). Now in normal loan lending system for as much time as you keep the money you need to keep paying the interest on a monthly base through installments. In business cash advance, you do not payback on a regular basis; you are offered a flexible return. Suppose on the first day you make a sale of £300, 10% from this £300 (£30) will be deducted and given to the lender. You will keep the rest £270. On the second day, you make a sale of £278, 10%from this £278 (£27.8) will be deducted and given to them and so on.

On each day your sale won’t be the same, hence the amount you pay them back will also not be the same. You will pay from whatever you sale in the market so sale more and return more.

How to check if you are eligible for a business cash advance?

You are required to be an established firm for the period of time as the lender’s terms and services proposed. Every good businessman knows the position of their business that how it’s going to make more profit. If you think you can make a good profit in the future but need a little “easy go” kick start then Business cash advance should be ideal for you. Your sales should be good and should be matching the criteria of the lender. If you are a firm that uses debit/ credit cards for pavements then this should be easy for you as you can make a record of the sales.

The lender has a right to check your sales so you should be open to that too. A business cash advance is a simple medium of growth for small and medium-sized businesses in the world. Small restaurants, beauty parlors, growing supermarket stores or any other vocational business that is fulfilling the criteria, are most benefitted.

Role of the lender and borrower in business cash advance

The lending companies usually maintain an eligibility criterion for the lending of loans to seeking businesses. Different lending companies have different criteria so a borrower should check for the one that suits best for his/ her needs. The lender has a right to see the records of your sales so as to maintain trust in your firm that it can return the amount within the deadline (if set). The lender takes pavements from the fixed proportional of your sale only (that is the whole idea). The lender can decline your future loan requests if you do not maintain the criteria for the current or last loan lent to you. The borrower should only request the amount that he/ she are confident to return.

In a business cash advance, there is nothing like you are in a debt or something because at the end month you are paying honest repayments.

What if you suffer a huge loss?

In a business cash advance, you pay from what you sale so nobody will come and ask you to pay back until you start making money (that is why some lenders set a deadline). You need not worry, just improve your sales and gradually pay back the loan you lent.  If you are suffering from a natural calamity then many lenders offer financial help that you can use to stand again. And when you start making money again, start paying back. This is the main benefit of having a loan lent as a business cash advance.

As said above there is nothing like you are in debt or something so do not be worried about your status that much. No lender shall ask you to access your bank accounts to pay them there and then. Your interest is a fixed amount of money that you have to pay; it will not increase like the regular loans you take.

A business cash advance is an effective and efficient loaning method that can be used to get a good sum of money to boost your business. Unlike traditional loaning methods where the interests as you keep the money for long duration business cash advance ask for a fixed amount of money back. It is good for those firms who dream of making their small firms big. The more the sales your business does the sooner you pay back the loan you lent, that’s it. A business cash advance is not a new concept in the market, it is known for a good time. It goes by another name called “merchant cash advance” where the merchant is anyone who is a businessman or an authority of a business responsible for these things.