Small Business Cash Advance – How Does it Function?

Intended for weaker credit individuals and/or Working Capital needs, a Small Business Cash Advance could be accomplished somewhat easily.

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A very common type of Small Business Money advance is where a finance company can advance you funds based on the future credit card sales.

We all know that Financing A New Business can be difficult but if you might have at least 6 months in business under your belt, and are in need of some working funds financing, this may be the way to go.

How does this work? Simply put, you are going to gather the final 4 months of your credit card sales statements to show the finance firm what your average monthly sales are. If you meet the criteria, they will buy a portion of your future credit card sales at a discount and you will pay them back as you “batch” out each day.

You will probably have anywhere from 9 to fourteen months to pay back the enhance. The great thing about this type of Small Business Financing can there be is no monthly payment to keep track of. The advance that you receive is paid back day-to-day based on the percentage of credit card dealings that you did for the day.

So if you have a slow day, your payment that will day will be smaller. If you have a far more profitable day with credit card transactions, your payment will be higher.

Several criteria that will be considered when approving you for a cash advance for your company is how many transactions per day you are doing, how big each transaction is, and so forth

It will be harder to get approved should you have only a few small transactions per day mainly because most finance companies who offer this kind of cash advance will not take more than a small percentage of your daily sales. To get obvious reasons, they do not want to put you out of business.

A Small Business Cash Advance can be a great alternative to Small Business Funding if you are in need of Financing A New Company or just in need of some Working Capital Financing. The finance companies generally tend not to care what you are using the money for so this type of financing is particularly good if you are strapped for cash or need money to expand.

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