Getting Fast Cash: Traditional Bank Loans Vs. Business Cash Advances

By Craig Lewis | Jun 11, 2010

Small business owners like you need to know your options when you need funding fast. Your final funding choice will ultimately make or break your business. Make sure that you are well-versed on your different options and that you know the differences between them. The most common funding source nowadays are traditional bank loans and business cash advances. Therefore, you need to know the following facts to make a good decision:

1. Banks are traditional in handling their finances. They are conservative in terms of approving loan applications. They are more likely to approve loan applications from those businesses that are already established rather than those who are just starting and have not yet made it big. They are particular with this so that they will be sure that the money they will release is going to be on safe and experienced hands.

On the other hand, business cash advance lenders are companies that are not as financially stable as banks but are more the risk-takers. They can easily grant small business owners the funding that they need as long as they feel that they have the earning potential that they can invest in.

2. Banks require a lot of paperwork from the small business loan applicants they will be entertaining. Most banks will require you to submit a business plan outlining what you need the money for. Your loan application will most probably not get approved if you do not have one. Also, you may be required to present them your financial statements. You may also need to make business projections, plans for re-payment, and have some collateral. Real estate property, stocks or bonds, and some valuable equipment are among the collateral that these banks may accept. Most of the time, complying with all these requirements is too much of a hassle.

There is no need to submit a lot of documentations when you apply for a business cash advance. You can experience fast and easy processing, and best of all, you do not need to have any collateral.

3. Banks need to know the specifics. They need to know what you need the money for. They also will want to make sure you use the money they will be loaning you for the purpose specified in your loan application. Therefore, they will probably need some documentation for it. As mentioned earlier, they are traditional and conservative.

For small enterprises, owners would like to have the cash as soon as possible without getting into a lot of hassle. When doing business cash advances, you could be able to use the money any way that you want without having to answer lots of demands from companies except for repayments. You will definitely have the financial freedom that you need and want when your business cash advance application is approved.

4. Business cash advance applications require no processing fees. Traditional loan applications will require processing fees that can be expensive.

5. Going for small business loan applications from banks take a long time to approve. Worse, there are no assurances that your loan application will get approved. Going for business cash advance applications, on the other hand, will mean fast and easy processing. In fact, you can get the results in just about 24 hours.

If you are a small business owner and you need immediate cash, which would you pick? Now that you know the differences between a traditional loan and a business cash advance, make the right choice.

Craig Lewis writes about loans, including restaurant loans. He writes mainly for Credit For Merchants, whose specialty is helping entrepreneurs get the best business cash advance.

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