Have you found yourself trying to grow your business but need help finding the funding you need? If so, a business cash advance might just be the solution you have been looking for. With the rise of alternative lenders, it is important to separate myths from facts when it comes to these sorts of funding options. That is why we are here to help you understand the truth about business cash advances, so you can make the best decision for your business.
Myth #1: Business Cash Advances are Loans
Fact: Business cash advances are not loans but rather a purchase of future credit card sales. This means there is little to no paperwork involved, and approval rates are typically much higher than loans from traditional banks.
Myth #2: Business Cash Advances Have High-Interest Rates
Fact: While the rates for business cash advances are typically higher than a traditional bank loan, they are still lower than many other financing options available to small businesses. Even better, no fixed payment schedule allows for greater repayment flexibility.
Myth #3: Business Cash Advances Require Collateral
Fact: Unlike traditional loans, business cash advances do not require collateral. Instead, lenders look at the business’s financial history and projected future revenue to determine eligibility.
Myth #4: Business Cash Advances Can Harm Credit Scores
Fact: Business cash advances do not impact credit scores, as they are not reported to credit bureaus. However, defaulting on a cash advance can lead to collections and damage to the business’s reputation.
Myth #5: Business Cash Advances are Only for Businesses with Poor Credit
Fact: While business cash advances can be helpful for companies with subpar credit, they are also a viable option for businesses with good credit looking for quick and easy funding.
