Category Archives: Commercial Business Loan Plans

Can business cash advances be an alternative to your business loan?

Can business cash advances be an alternative to your business loan?

What are business cash advances?

You must have known about business loans.

Have you ever heard about business cash advances?

Business cash advances are as an alternative to a business loan.

In a business cash advance also you get business up-front cash like business loans.

The difference is this that this is unsecured.

You do not need any collateral security or mortgage anything for this advance and you get the money.

There is a just a contract where the terms of payment are mentioned.

In the case of business cash advances, the repayment is on a regular basis or rather daily basis.

There is no fixed amount or fixed period of repayment.

Here the repayment is on the basis of your sales, unlike the business loan where you have to pay on a monthly basis a fixed amount with interest.

In business cash advances the repayment is on the basis of credit card receipts.

They take a percentage of your credit card sales.

Are business cash advances a better option?

Whether business cash advances or business loan is better option depends on the urgency of needing a loan. It also depends on the size of the business and its income.

For small businesses business cash advances can be a better option.

This is because it is easily available without any security. For big businesses it depends on the urgency.

You can avail business cash advances faster than loans.

There are pros and cons for both business cash advances and loans.

These are like two different sets and also are alternatives.

So for some business where it is urgent to get some up-front cash business cash advances can be the last resort.

Some pros and cons

Business cash advances are better for businesses where the income comes mostly from debit and credit card sales.

So they can avail it faster. Here are some of the advantages and disadvantages of getting business cash loans.

Pros:

You can get business cash advances faster than business loans.

There are no heavy paper works you just need to show the credit card receipts and you will get the cash.

You do not need any collateral security to get the advances.

If your sales are low then you can pay less.

As you have to pay a percentage of your credit card sales, if the sales are less then you do not have to worry about paying a huge amount.

Cons:

If you have huge sales then you will have to pay more at one time as you have to pay a certain agreed percentage of your credit card receipts.

The contract can be confusing sometimes as there is no fixed amount to pay.
If you can pay early, there is no benefit in that.

This will not save you any interest payment.

So business cash advances can be and should be treated as last resort.

This is because with some advantages there are disadvantages also. Before seeking the advances it is better to look for other alternatives.

A few words regarding different great commercial business loan plans

A few words regarding different great commercial business loan plans

Nowadays taking a business loan is not a big deal – endless business loan options are available in the market; loan takers can use government banks, co-operative banks along with private organizations and lending agencies.

But before taking any loan, loan takers should aware of the loan plan, its duration, rules, etc.

As it’s an open market, private organizations are coming up with several facilities and customer friendly approach capturing the world market.

Existence of too many options does not mean each and every loan option is appropriate and effective; being a starter he /she should have been well informed about the different business loan options and their pros and cons so that while he/she would select apt loan type for his/her business considering his/her requirement and position.

Basically, three options can be accessed by the starters-

Small business administration loan;

Conventional bank loan; and

Alternative lenders

But all three options have certain advantages and disadvantages – this piece would talk about great commercial business loan information and their pros and cons.

Small business administration loan

This loan facility has offered a wide range of options such as loan program, microloan program, disaster loan program, real estate and equipment loan program etc.

As per small business administration loan guidelines banks, community development institutions, micro lending organizations are offering SBA loan.

Advantages:

In the case of SBA loan, lender’s risk factor is very minimal as the government is guaranteeing the money would be returned to the bank.

Rules and regulations of SBA are very much favorable to the loan takers.

Disadvantages:

Elaborate paperwork has to be done;

It’s time taking process- you can’t get an immediate loan.

Conventional bank loan

Barring SBA loan, a conventional bank loan is another alternative. But in this case, the government would not take any responsibility for returning the money. The line of credit, professional practice loan, working capital loan and merchant cash advance offers are included in this loan.

Advantages:

The rate of interest is very low, so anyone easily avails this loan.

Disadvantages:

Loan takers get a short time to repay.

Alternative lenders

At present availability of alternative lenders is quite high.

You can also access direct alternative lenders who directly invest money in small business or marketplace.

Advantages:

This is very quick process,

No need for appropriate financial status;

Disadvantages:

Rate of interest is bit high

Conclusion:

Having read this piece hopefully businessmen would get a clear idea about Commercial Business Loan.