(Newswire.net — February 9, 2018) — Nowadays, a lot of small to medium-sized businesses are opting for the business cash advance over the traditional bank loan options. This paradigm shift has become a trend among small and medium tier businesses. It’s quite evident that businesses need working capital for running the operations and expanding themselves. However, sometimes lengthy paperwork, APR rates and restrictions on usage of the loan amount makes the borrowing option difficult for a business. There are many reasons for this and in this article, we have covered the top six reasons why business cash advance is a better choice over other loan options.
1. Less risks when you default on loan
Unlike the traditional bank loan or line of credit where you might put your business or personal property at stake, the business cash advance option doesn’t seize your property when you default on the loan. This makes it an unsecured kind of loan option which is more preferable for small businesses. In most of the cases, the small or medium business loans are centered around individual owners of the property and thus free from any risks of personal property in the event of a failure.
2. Easy and fast to obtain
There is less paperwork and difficulty in borrowing a business cash advance which makes it a better choice over any other alternative. Usually, the traditional options require you to undergo a lot of steps, right from the time you have filled the application. The entire process thus becomes long and your business probably would not want to wait that long.
3. Lesser chances of rejection
Even after the lengthy application process in the traditional loan options, it’s not guaranteed that you will get the loan. There are credit checks done in traditional loan methods and with a poor credit check, not only the loan becomes difficult to obtain but the rates of interest are also kept high. In the case of a business cash advance, you are not worried about any past credit history and the entire process is fast and hassle-free. You don’t necessarily need to get all your records audited just in the preparation of a cash advance process. In the traditional bank loans, an audit plays a vital role and the applicant has to be ready at many fronts to increase the success rate of his application. With business cash advance, there are significantly less chances of rejection and that can happen only when the lender is not confident about your future paychecks.
4. Minimal or no restriction on usage
With business cash advance amount, you are free to use it in many ways your business or needs demand. You are free to use the amount for anything because the lender is not worried about how you use it. The lender’s interest lies in the repayment which you will be paying using your paychecks or profits.
5. Expanding your business
Since a business cash advance doesn’t restrict you in using the money in any way, you can use it to expand your business slowly. Let’s say by adding more inventories to your warehouse. Increasing a resource or using it for a one-time bonus to motivate your employees. You can also use this amount to innovate with new products or technologies that are emerging in the market and stay ahead of your competitors.
6. Easy repayments
Since you get the cash advance in lieu of the upcoming profits or paychecks that your business is going to make, the repayment becomes a lot easier and especially when you don’t have to follow a fixed schedule for the payments. The repayment options are pretty based on your source of income and thus the lending company collects the amount from the sale you make. This makes it easier for the business to pay back the amount as it earns it.
In the end, if you aim for a short-term financial aid, then a business cash loan is the best available option in today’s time. It has many advantages that other borrowing options lack and it’s not a surprise that many businesses already are exploiting this option to their maximum benefits.