Small company Cash Advance – How Does it Work?

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

Just how? A very common type of Small Business Money advance is where a finance company may 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 it work? Simply put, you are going to gather the last 4 months of your credit card product sales statements to show the finance organization what your average monthly product sales are. If you meet the criteria, they will purchase 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 likely have anywhere from 9 to 14 months to pay back the improve. The great thing about this type of Small Business Financing will 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 day will be smaller. If you have a more profitable day with credit card dealings, your payment will be higher.

Some 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, etc .

It will be harder to get approved for those who have only a few small transactions per day because most finance companies who offer this type of cash advance will not take more than a little percentage of your daily sales. Regarding obvious reasons, they do not want to place you out of business.
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A Small Business Money 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 Funds Financing. The finance companies generally do not care what you are using the funds for so this type of financing is especially good if you are strapped for cash or need money to expand.