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The Advantages of a Cash Advance Over a Traditional Bank Loan

Sometimes a rainy-day fund is not enough for a small business that needs cash quickly to cover emergencies, such as a broken HVAC system, or to make new investments for projects like remodeling a convenience store or buying new equipment for a deli or coffee shop.

A merchant’s first thoughts may turn to a traditional bank loan, but cash advances offered by some Point of Sale companies are a much better path for business owners to get the most out of their money. There are many reasons to choose a cash advance over a traditional loan. Cash advances are significantly easier to apply for than loans, and the best POS companies are supportive and helpful. Plus, if approved, a cash advance moves money into your bank account in a more expedient manner.

Applying for a bank loan is a job in itself. Loan applications can be complex and complicated, a red tape nightmare. The lending institution asks for a myriad documents that may not be immediately accessible, delaying the application process. Bank loan agreements also may include fine print and hidden fees on top of already excessive interest rates. 

Cash advance applications offered by superior POS companies, by comparison, can take as little as 10 minutes to complete. Paperwork is transparent and out front, making it easy to understand the process.

Another big advantage that the best cash advance companies offer is that no collateral is required. A reputable POS business that offers cash advances won’t be repossessing your car or put a lien on your store if you fall behind on payments. Instead, they will work with you on making things whole.

In addition, banks look very poorly upon bad credit. It could be an immediate deal breaker or lead to exorbitant fees and interest rates. Not so with cash advances. Cash advance rates and terms are based on business’ future receivables.

Once approved for a cash advance, you may see funding in as little as 24 to 48 hours, depending on which POS company you have employed. It is an incredibly rapid rate compared to bank loans that can take a week or more to process. This is vital for business owners that need funding immediately to keep the operation running smoothly.

Cash advances, unlike bank loans, may be used for whatever projects a business owner may need. A bank loan typically allocates money for a single use, like upgrading equipment. Cash advances provide merchants the option to distribute the funds as they see fit.

Part of a cash advance could be used for new machinery, while the rest could be put into a rainy-day fund or pay for a surveillance system. There are no limits on how a business owner can divvy up a cash advance.  

Cash advances present a tremendous opportunity for businesses running low on funds. They give businesses in dire straits a lifeline. For these establishments, cash advances are the best bet as opposed to bank loans.

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