Cash Advances: More Flexible Than Traditional Loans
When businesses take out traditional loans, the built-in terms prevent growth, and can even make it difficult for businesses to thrive in a competitive economy. These days, business owners demand more flexibility, and for that, entrepreneurs are using cash advances.
Traditional Loan Structures Are Becoming Antiquated
The traditional loan model has been around since time immemorial. Banks and similar institutions give business owners the capital they need in exchange for debt and interest on the amount borrowed. However, the regular monthly payments on loans can really place a strain on finances, especially during light sales periods. The impacted credit ratings from loans prevent businesses from seeking larger financing when the opportunity for growth arises. Finally, the prohibitive prepayment fees keep businesses in debt to lenders longer than they need to be, simply for the sake of racking up interest payments.
Cash Advances Are Streamlining Commerce
Cash advances can be arranges quickly and efficiently. Advances do not place any debt on the balance sheets, nor do they impact business credit ratings. A cash advance, as the name implies, is money given to businesses against future sales, rather than existing collateral.
The Flexibility Of Cash Advances
Unlike traditional loans, there are no fixed payments with cash advances. Instead of making regular monthly installments, payments are made from a percentage of sales, specifically, credit card transactions. When a customer makes a purchase with a credit card, a small percentage automatically goes toward repaying the cash advance. Since payments are based on sales, business owners are never caught out of pocket, and the flexibility helps to maintain a steady cash flow. For these reasons, many businesses use cash advances to prepare for seasonal rushes.
Prepayment Fees Are A Thing Of The Past
If your business is doing well, and you want to pay down the existing balance ahead of schedule, a funny thing happens. Penalties and prepayment fees are triggered. Prepayment fees are nothing new. They are designed to scare off businesses and keep them locked into the loan payment schedule so the lender than make as much money off of interest as possible. Cash advances have a different approach. If a business is doing well, there is no need to prevent prosperity. Cash advances do not have any prepayment fees or prohibitive penalties for paying off the balance ahead of time.
Get The Flexibility Your Business Demands
At BG Capital Funding Group, we believe businesses should be able to get the capital they need without the prohibitive restrictions of traditional lenders. Contact our offices today to learn more about cash advances and how they can help your business to thrive and grow.