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The Advantage of a Cash Advance

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The Advantage of a  Cash Advance Powered By Docstoc
					Business cash advance is the term used by companies for selling their future credit
card sales in exchange for a lump sum payment. It works like this: a business, needing
capital infusion, applies for business capital from a cash advance company. The
company will then check if the business qualifies for the cash advance and will
approve the application accordingly. After this, the business will agree to give a
portion of its credit card sales to the company that gave it capital.
  This payment scheme provides some advantages because, unlike other capital
funding schemes, you can spend the capital you get in any area you see fit. The cash
advance company will not dictate how you spend because it is up to the business
owner to decide. In turn, this means more flexibility in terms of improving your
business.
  With regards to application, cash advance companies are more lenient regarding
documents needed. Typically, companies would require credit card sales records for
the past year, as well as paperwork to show that the business has been running for at
least a year. Here are other advantages you may wish to consider.
  You don’t need to worry about incoming payment deadlines. Unlike, traditional
loans, business cash advance companies do not require payments on fixed dates so
you have fewer worries. Since a percentage of your credit card payments go to the
company, you pay the company when your customer pays you using a credit card.
  There will be more breathing room in terms of payment. Since the business cash
advance entails a percentage from your credit card sales, your sales will dictate how
much the loaning company will get as payment. For example, if you assign a ten
percent credit card sales payment and you get $1,000 for January, the company will
get $100. If, by February, you get $800 credit card sales, the company will receive
$80 as payment and so on until you pay the amount you got from the company.
  Payment periods are highly flexible. The business cash advance company will get
payments from your credit card sales and this might take a while depending on the
growth of your business. If you have high credit card sales each month, then chances
are you will only pay for a short time. Lower sales may take you longer but at least
you don’t have much to worry about.

				
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posted:2/22/2011
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