Business cash advance is a type of payday loan in the business world. If you can’t provide a line of the credit for your business, merchant cash advances are one of the solutions. As well as payday loans, they are easy to get but they cost a lot.
When the company receives a small business cash advance, it will have to return the principle and the fee (usually in 25% of the cost of the principle). Common repayment period makes up one year. The lender receives a transfer from the merchant account of the borrower weekly. Therefore, the speed of the repayment depends on the revenue of the company.
The main benefit is fast application and ability to apply with poor credit. Lenders issue business cash advance loans in one week or less. Business cash advance bad credit is possible.
Still, there are many disadvantages to accept if you apply for this kind of short-term loan. The main drawback of the cash advance business is the high cost of this loan. APRs mostly go with triple digits. Some lenders don’t mention addition charges that are still mentioned in the contract. Therefore, the cost of the loan might be higher in the reality. Therefore, don’t forget to reread the agreement thoroughly.