merchant cash advances
Cash for business owners

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  • Dry Cleaning / Laundry Services
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  • Retail / Specialty Stores
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  • And More!

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    Business Merchant Cash Advance

    Business Funding

    What is the difference between Merchant Cash Advance Loans and Bank Loans?

    Merchant cash advance loans are the best option for small scale businesses that require potential risks. Most of these businesses do not get approved for bank loans because of the riskiness and being a new business in the industry. But merchant advance loans should be not considered as the perfect capital source. This information will discuss some of the most common shortcoming of these cash advance loans against bank loans.

    It is quote common for small businesses to need some kind of working capital for their daily processes. Seeking loans from the bank seems to be the only option for getting this financial capital. Merchant cash advance loans are far more beneficial for small businesses as compared to bank loans. If you own a small business then it can be really helpful to understand the difference between these loans and make an educated choice. This information will describe some of the major key difference between merchant cash loans and bank loans.

    The only common factor among bank loans and merchant cash loans is that they both lend money. Advances come with the benefit of high rate of approval and that too in comparatively lesser amount of time. The current state of economy has made it really hard to get approved for a bank loan for small business. Moreover, it usually takes up to four weeks to find out whether the loan is approved or not. It can be very crucial for small businesses to act on time rather than waiting for the loans processing.

    Cash advance loans are processed quickly because of lack of paper work involved in the process. These lenders are not subjected to federal or state regulations either and so it is not required to have collateral with these loans. Money from cash advance lenders can be used in any form that the borrower may wish to and one need not to worry about fixed repayment schedule. Generally in case of bank loans you need to make payments irrespective of the current business otherwise there are penalties. After learning all of these benefits, one may think that how these loans work exactly. Actually the lender purchases receivable that will come up in future at a discounted rate. It allows borrower to get immediate cash and the lender will get a part of all the future billing done against your credit card until the whole amount along with interest has been paid off. In short, these lenders will take money only when your business is doing well unlike the bank loans. It is always good to make a balance between repayments and smooth running of your business. These cash advance loans help you in achieving that target.

    Another important difference that should be considered is the rate of interest. Because of the quick processing, no collateral and easy repayment options associated with cash advance loans; they charge high interest rates as compared to banks. It is advised to go for these loans after considering your requirements and the charged interest rate.

    The chances of getting approved for a bank loan in these economic conditions are quite hard but that should not affect a small business owner and entrepreneur. It is best to consider the benefits of Merchant Cash Advance Loans and get going with your dream.


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