What is an Online Cash Advance?

2015-01-21

Jeffrey Bumbales

You own a business, therefore you need capital. The problem with getting it lies in the space between what a traditional bank can do and how well you fit their criteria. For a lot of small business owners, that space can be insurmountable. A merchant online cash advance could be the answer you’re looking for.

Just a few years ago, the economy was so poor that hardly anyone could qualify for any loan, almost regardless of financial fitness. But Cheryl Conner, Forbes contributor, explains that although the economy has been on an upswing, banks have yet to respond with any more options for small business than existed before the bottom dropped out.

That’s where a merchant cash advance comes in. It’s the option that you need, just when you need it most.

Online Cash Advance: Alternative Funding Evolved from Necessity

Traditional loans go through a lengthy and rather invasive approval (or denial, in most cases) process. A small business is asked to provide tax returns, an accounting of liquid assets, possibly collateral, and they still might not make the cut.

One major condition is the length of time that the business has been in operation. If you’re new on the block, chances are you’re out of luck on that basis alone. New business owner, Arturo Calderon, told Entrepreneur magazine that when he needed a boost to stay in business, a merchant online cash advance was the route that he chose. Approval was easy, he had money within a couple of days, and the payments were automatic.

A Merchant Cash Advance is Not a Loan

Loans have interest rates, set repayment terms, and an end date that’s determined up front. Each payment whittles a little bit of the principal, and a lot of the interest until eventually the entire debt is paid off. If a payment is missed, forgiveness is hard to come by.

A merchant cash advance works another way. It gives small business owners critical cash, but the payback period has a different structure. Instead of a fixed interest rate, repayment is more of an agreement where each time the business makes a credit card sale, a percentage of the sale automatically goes to repay the debt. So when sales are high, repayment is high. And when sales are low, repayment amounts will drop.

Both the Approval and Cash Advance Arrive Quickly

Anyone who has ever applied for a loan knows how long it can take from the time the application is filed to the time when, hopefully, the funds are disbursed. Some loans take weeks, but the approval and funding period for others can linger on for months. A merchant cash advance steps in when the timing is critical. But is there any time when it isn’t? Instead of a lengthy wait, the whole process takes only a few days. That’s a real boon for small businesses that want to expand or need to cover an emergency.

Alternative lending bridges an important gap where traditional sources just won’t work. With a merchant cash advance, you’re not judged by your assets or how long you’ve been in business. Your value is in how much love your customers have for your product or service. And that’s how it should be.

Credibly was born to help small businesses just like yours expand, grow, and reach new heights. Even if your business is relatively new, you can pre-qualify to find out how much peace of mind comes from having the capital you need when you need it.