What is a Business Cash Advance?
In short, a business cash advance is a type of alternative lending based on future revenue from merchant card transactions.
With a fixed charge, agreed upfront, you will then be able to repay the amount based on a percentage of the merchant card transactions as opposed to a fixed monthly amount.
Why take out a Business Cash Advance?
At times, most businesses require access to additional working capital for several reasons, including growth and expansion, refurbishments, purchasing equipment, marketing or even tax bills and recruitment.
Traditional funders, like your high street banks, have tightened their criteria over recent years, allowing these alternative types of business funding to grow considerably.
So even if you have been rejected by your bank, that does not mean that you will not be eligible for a Business Cash Advance.
How does a Business Cash Advance work?
Business Cash Advance Example
Amount Funded: £20,000
Factor Rate: 1.12
Amount Repayable: £22,400
Monthly Repayment: 10%
In the illustration above, when a card transaction is made the funder receives their agreed split of 10% on every sale made.
Keep in mind that this is not interest, the fixed funding is already applied, this is the proportion card transactions to repay the business cash advance.
With the fixed funding applied, you will have no early or late fees and no hidden charges. If your income increases then you pay back more, if your income decreases then you pay back less.
It is a very flexible way to repay as the amount is based on your card transactions.
For a Business Cash Advance contact us
Contact The Funding Store today for a quote or to discuss more about how asset refinancing could work for your business.
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This article has been produced by The Funding Store for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by The Funding Store (MK) Limited. In all cases appropriate professional advice should be sought before making a decision.