Compare These Top Vendors for Cash Advances Online

Cash Advances Online for Small-Medium Businesses

Whether the economy’s good or bad, every business owner will occasionally need a fast infusion of capital. Unfortunately banks are increasingly reluctant to offer credit lines to small and medium businesses. If you’re a business owner and this sounds familiar, consider a business loan alternative: online cash advances.

First things first: a cash advance is not a loan. There is no interest associated with it, and approval is based on credit card sales processed by your business rather than business credit. And unlike business loans, merchant cash advances require neither collateral nor personal guarantees. Even though cash advances are not loans, you need to treat the advance as a loan and understand what the costs are to your business. To illustrate how an online cash advance works it’s helpful to walk through process from start to finish.

Step 1: Determine if your business eligible for an online cash advance.

The first rule of online cash advances: your business must process credit cards as a form of payment. This is what separates a business loan from a cash advance. Instead of regular, fixed payments, a cash advance is repaid by allowing the lender to collect – directly – a set percentage of your daily credit card sales. The loan amount is typically recovered by the vendor in less than 12 months, but there is no specified due date, and the retrieval percentage rate is determined based on the gross revenues and sales margins of your business.

Step 2: Calculate how much cash you need.

How much cash do you need? From $100 to $500,000, online cash advance lenders have minimum and maximum loan amounts. Find a vendor with limits that match your immediate need. Once you establish a relationship with a lender you’ll be able to borrow larger amounts, but first-time applicants are rarely granted the maximum loan amount.

Step 3: Find an online cash advance service.

There are many. So many that you might feel overwhelmed at first. Security, ease of use, and costs should determine your choice.

Stick with online lenders who use Secure Socket Layer (SSL) encryption protocol. The biggest benefit of applying for a cash advance online is the lack of paperwork and faxing. Still, a lender will require you to provide key financial details about yourself and your business, and protecting that information in cyberspace is critical.

Applying for the advance must be simple. Look for cash advance lenders who have a straightforward online application, with terms and conditions clearly outlined.

See if there are any fees associated with your cash advance, including application fees and up-front or balloon payments.

Step 4: Apply.

Online advance lenders typically ask you how long you’ve operated your business, monthly sales volume, and total gross sales. This allows them to determine your cash advance amount as well as the retrieval rate for repayment. The approval process varies from two minutes to multiple business days, and once approved it will take as much as 30 days – or as little as an hour – for the cash advance to be placed into your account.

Online Cash Advances are helpful when bank credit isn’t an option, but don’t view them as nothing more than emergency rescue funding – they’re a viable option any time you want to grow or improve your company.