Every business needs advance cash in order to run the business effectively. If you have sufficient cash balance then it becomes easier for you to repay your loan dues. There are different reasons why various business houses often apply for cash advance. Some of the reasons could be up gradation of equipment, carrying out major repair work or major expansion of business.
Understanding of Few Key terms
If you are looking for funds to run your business then you must be clear with few key terms as mentioned below.
- Cash advance:This is another alternative to commercial loan. However, this amount has been obtained by you due to your own business deal.
- Cash advance business:The Company providesand approvesthe fund for thebusiness when it is needed to run the business.
- Factor rate: This is the amount that is charged by the provider in order to provide cash advance to run the business
- Daily retrieval rate: This is the percentage of returns of credit card that is provided on daily basis
Application for cash advance
In order to obtain cash advance you need to apply for the same. Some of the lenders such as Merchant Advance Express allow you to fill up the application on their website itself. In any case, you need to send your request for cash advance either through email or by an application. The cash provider will not enquire about your credit report.
However, they will check the viability of your business before providing cash advance. They may however ask for certain financial documents related to your business. You may also clarify from the cash provider about the type of documents needed by them to provide cash.
The Approval Process
There is no fixed time limit for approval of your application for cash advance. Some application may get approved within few days or weeks and some of the application may be approved within few hours.
After your application is approved, the agent of the cash provider will contact you and let you know how they would like to get back their payment on daily basis. If their terms are acceptable to you then the required sum of money will be transferred to your account.
You need to repay the cash advance amount as per the agreed terms in each month. The rate at which you will be paying back is decided after negotiation with the cash provider. The amount that you pay every month may however vary, but the percentage of the revenue is always maintained the same.
Finalizing the Contract
As soon as your application for cash advance is approved by the cash provider company, you need to agree to a contract where all the necessary terms and conditions for repayment of the cash advance will be mentioned. Therefore, before agreeing to this contract, you must read it a number of times and understand each and every term carefully and then sign the contract.
Patrick Murphy usually writes on topics related to finance and business. If you are a small business owner and looking ongoing funding for your company, please feel free to visit their Merchant Advance Express website.