Money Solutions with a Business Cash Advance
Running a successful business means having enough money on hand to help you continue to grow. That is why Clark Commercial Brokerage, LLC is here to help you keep your progress moving with a business cash advance. By taking advantage of our business loans in Livonia, MI, you are able to get the money you need now and pay off your advance as your customers pay you. Contact us today with any questions or concerns you have about signing up for a cash advance.
Frequently Asked Questions
Does a Business Cash Advance Affect Your Credit Score?
The repayment activity of a business cash advance is not generally reported to the credit bureaus. That means your credit score should remain unaffected when it comes to signing up for your cash advance.
How Does a Cash Advance Work?
A business cash advance is repaid either daily or weekly via your merchant processor or a daily ACH debit from your bank account. The remittance amount is typically based on your daily sales, meaning there is no set repayment term. Interest rates can run a little higher than regular business loans and usually range from 9% to 47%, depending on the length of time you have been in business, the consistency of revenue, and the seasonality of your business.
Can a Startup Get a Business Cash Advance?
The minimum requirements for a business cash advance include the following:
- You Must Have Been in Business for At Least Six Months
- You Must have a Minimum Monthly Revenue of $15,000
- You Must Have a Business Bank Account
- You Must have a Minimum Credit Score of 500
What Is the Difference Between a Business Loan & a Cash Advance?
Both business cash advances and loans can provide you with capital when you need it. With a loan, you are required to pay back a fixed amount (principal + interest) within a specified amount of time—usually via a monthly statement. These traditional loans also typically require some form of collateral.
Conversely, a business cash advance does not typically require any specific collateral to be attached. There are far fewer restrictions when it comes to cash advances in general, but this can come with a higher overall cost. This makes it a great option for newer businesses—or those with bad credit—since it is easier to get qualified than a traditional loan, and you will receive the emergency funding you need much quicker.
What are the Disadvantages of a Business Cash Advance?
While merchant cash advances can be convenient, they aren’t a cure-all for every financial situation. It’s important to consider the potential disadvantages before you take out an advance for your business.
First, they tend to be expensive since the rates are usually higher, and you must repay in a short period of time. Likewise, business cash advances are a short-term solution, so your financial issue may still exist after the loan period ends. If you need a long-term, more affordable solution, an advance may not be right for you.
Are Business Cash Advances Worth It?
A merchant cash advance may be the perfect solution if you need capital as soon as possible but lack the credit history or collateral for a traditional small business loan. We recommend them most for short projects like a small but important improvement to your business or a project with a soon and definite deadline. Depending on the lender, you can also renegotiate repayment options if you encounter a slow sales period.
Every situation is different, so you should assess your company’s state and financial needs before pursuing a business cash advance. Don’t hesitate to ask the lender detailed questions to estimate the risks and rewards.