Business Cash Advance - Greatest Advantage Is No Collateral Expected
Do you worry that the global credit crunch will leave your business with not enough funds
? Is a lousy credit history holding you back from get business financing? Are you afraid of losing collateral if you get a commercial loan? Would you be keen on a financing alternative that is not only speedy and painless but also does not need a collateral? If yes, then you should give a serious thought to business cash advance or merchant cash advance.Pledging your home or vehicle as a collateral for a business loan
Although home equity loans offer low interest rates, lengthy repayment schedules and tax deductible interest make them very risky for small businesses. If your business ventures don't work out, your home may be foreclosed.
Similarly, when you offer vehicles as collateral, you give your loan company control of vehicle's title. If, by any chance you are unable to repay your loan, lender has the right to take over ownership of your vehicle. Pledging collateral is an extremely risky option in these economically unstable times. With business cash advance, you can bypass this pitfall altogether.
How can business cash advance providers offer an unsecured advance?
Pledging a collateral has been an indispensable part of lending since its early origin. They are a lender's defense against a borrower's unwillingness or inability to repay loans. How then can business cash advance providers do away with a collateral?
Let's go into what makes business cash advance funding successful without a collateral. First, in the networked and easy-access internet age, it is simple for providers to recognize authentic borrowers and creditworthy businesses from those going downhill. To evaluate your eligibility, lenders check your credit card sales volumes, which can be accessed easily and verified. The second reason is that paying back the advance is not a choice after you sign the agreement. Since payments are deducted automatically at the credit card processor's end, lenders are pretty much covered.
Great thing about this type of loan is that the providers do not charge you so high that it inhibits business growth. As part of the agreement, a set percentage of your monthly credit card sales receipts are paid out to the provider. This works well as your payment amount will fluctuate with sales volume and do not turn into an needless burden.
Matching funding solutions to business situations
While a home equity loan may be more suitable in certain scenarios, business advance is perfect when you are looking for low-risk, quick and minimum fuss financing. The crisis that has hit several financial institutions post the recession and zero collateral makes these loans just right to pull up stressed small and medium-sized businesses. There is no point in relying on slow and risky banks loans when better options are available. Business advance is the most recent advancement in commercial lending. Remember, no collateral is a good thing in funding and business cash advance fits that bill very well.
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