Being in the electronic payment industry, we get asked a lot about the cash advance against receivables programs offered by most processores these days. And judging from the number of posts on this forum from people in need of cash, this is developing into a huge industry. I thought I'd take a minute to publically post my responses to the questions I get almost daily on this subject.
IS CASH ADVANCE A SCAM? There are lots of people out there in the cash advance business nowadays. Certainly, some are scam artists, others are not. But this is true of all industries. There are scam doctors, lawyers, bankers and so forth out there as well. The way to avoid being scammed is due diligence--do your homework, understand what you are signing, check references, deal with reputable people.
IS CASH ADVANCE A GOOD SOURCE FOR BUSINESS FUNDING? Obviously cash advance can be more costly than traditional funding sources. So, also obviously, any business in need of cash should first visit their banker--cash advance is best viewed as a final resort.
ARE CASH ADVANCE COSTS A RIP-OFF:? --Clearly, cash advances are not cheap. But whether or not it makes sense for any particular business depends on the circmstances at hand. As stated alrrady, if you need funding, your first stop should be your bank. But IF your bank is unwilling to fund you, and IF you have no other sources to go to, and IF obtaining the funding or not means the difference between life or death for your business....then you need to weigh your options. In most cases, absorbing the costs of cash advance funding is far better than the alternatives.
ARE CASH ADVANCES EASY TO OBTAIN?--In many cases, yes. At the very least, they are easier than many other more conventional sources in terms of credit scores and other requirements. But there ARE underwriting requirements involved. If there is a way, a competent professional should be able to find it. As with any other lending sources, there are some lenders willing to assume more perceived risk than others, which of course carries a higher price tag per the risk/reward rule. Again, the trick for the borrower is to deal with a professional broker who knows where to look for such people.
If anyone has questions or commens, please feel free to ask me.
AMSPCS]
amspcs@juno.com
www.MerchantServices-help.com
IS CASH ADVANCE A SCAM? There are lots of people out there in the cash advance business nowadays. Certainly, some are scam artists, others are not. But this is true of all industries. There are scam doctors, lawyers, bankers and so forth out there as well. The way to avoid being scammed is due diligence--do your homework, understand what you are signing, check references, deal with reputable people.
IS CASH ADVANCE A GOOD SOURCE FOR BUSINESS FUNDING? Obviously cash advance can be more costly than traditional funding sources. So, also obviously, any business in need of cash should first visit their banker--cash advance is best viewed as a final resort.
ARE CASH ADVANCE COSTS A RIP-OFF:? --Clearly, cash advances are not cheap. But whether or not it makes sense for any particular business depends on the circmstances at hand. As stated alrrady, if you need funding, your first stop should be your bank. But IF your bank is unwilling to fund you, and IF you have no other sources to go to, and IF obtaining the funding or not means the difference between life or death for your business....then you need to weigh your options. In most cases, absorbing the costs of cash advance funding is far better than the alternatives.
ARE CASH ADVANCES EASY TO OBTAIN?--In many cases, yes. At the very least, they are easier than many other more conventional sources in terms of credit scores and other requirements. But there ARE underwriting requirements involved. If there is a way, a competent professional should be able to find it. As with any other lending sources, there are some lenders willing to assume more perceived risk than others, which of course carries a higher price tag per the risk/reward rule. Again, the trick for the borrower is to deal with a professional broker who knows where to look for such people.
If anyone has questions or commens, please feel free to ask me.
AMSPCS]
amspcs@juno.com
www.MerchantServices-help.com
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