Post a new topic
    11 Replies Latest reply on Sep 4, 2008 10:24 AM by Chris_Black

    Cash Advance Loans?  Good, bad, and the ugly..

    Niteryder Newbie
      We see a whole lot of talk about cash advance loans for your business. Basically, the lender will take a cut of your credit card sales, and in return give you money you need for your business. In short, it's really expensive.

      To me, this seems similar to payday loans, which are horrable. Can someone convince me otherwise?
        • Re: Cash Advance Loans?  Good, bad, and the ugly..
          LUCKIEST Guide
          Cash Advance Loans? Good, bad, and the ugly..

          Can someone convince me. I could, I would if I knew who I was writing to.

          Go to Members page and share some info and then I would be glad to
          continue this discussion.

          • Re: Cash Advance Loans?  Good, bad, and the ugly..
            MerchantClub Newbie

            Hi, my name is Nicole and I work with a cash advance company. The truth is yes, cash advances are expensive money. But there are definately reason that so many businesses use the route to get their money.
            First of all, because of the way the economy is so unstable, most bank reject small business for bank loans and credit requests. Cash Advance also, depending on which company you deal with, usually have a 90-98% approval rate, in avg of 24-48 hrs. Funding after approval usually only takes 3-5 business days. I know our particular company requires no collateral, you can use the money for whatever you need it for. Most would want to know exactly what you are doing with their money. We dont charge any interest, just a flat set payback fee. So there is no monthly charge or any of that, if you have a slow day you pay back slower, fast day pay back faster.
            So yes, it is expensive money, but its fast, and having no collateral makes it convenient. And in most cases, its one of the only reason smaller sized businesses can get extra cash.
            • Re: Cash Advance Loans?  Good, bad, and the ugly..
              Fortis Adventurer
              I dont know too much about those types of loans but horrible to me and horrible to someone else might be too different things. I\'m not hear to convince anyone whether that product is right or wrong for their situation because I dont know their situation and I dont know too much about cash advance loans.

              I do however believe that not everyones business situation deserves the same solution. Someone with a great track record deserves better financing than someone who doesnt have a good record. Credit\'s, businesses, debt, risk, etc.. are all different so that if cash advances solves someone problem and they have to pay a bit more than a traditional loan that they couldnt get approved for then yes its the way to go. If you have better credit and a better business it might not be. People have to understand their situation first.

              Lenders weight peoples and/or company\'s risk. When people or businesses have a history of being risky and history tends to repeat itself then charging X amount is justifiable. Think about this way. If you had $25K to lend out. A company thats in the beginning stages with no experience wants money. You verify their credit. Its considered \"high risk\". Would you lend that money for a small percent return over 5 yrs with a large chance of no pay back? You might be better putting that money on a football game. The reward has to be worth the risk.

              Their are a lot of options out there but not everyone has a lot of options. When your business is your life you will do whatever it takes to make it happen.

              Some products are quick and easy so people pay more for that. Its all what makes sense for people and their business. This is all just my opinion though. Good luck to all.
              • Re: Cash Advance Loans?  Good, bad, and the ugly..
                Chris_Black Newbie

                Well, it is pretty basic. For most small to medium size business owners. obtaining a loan through traditional methods such as an unsecured or secured bank loans or a private investor is a very tedious process, not to mention nearly impossible in today's economy. A Business (Merchant) Cash Advance is set up for those who don't want to have to put their personal assets up for collateral, have less than perfect credit. It is a way for a business owner to get the funds they need quickly (around 7 business days).

                The total charge on a business cash advance is the same as a business loan taken over a 5 year period at generally 12%. The business owner borrows based upon their credit card receivables. We have more information about the comparison on our website: I hope this helps.

                Chris Black
                Making Obstacles Manageable
                (866) 942-9199 ext 223