Business Cash Advance

Business Cash Advance – Small Business Cash Advance by First Funds

Business cash advance is one of the most easiest and popular methods for small business financing. Cash advance business has been around for a while but gained the popularity and exposure in the last few years. There are merchants who purchase a predetermined number of VISA or Master Card sales receipt and provide business cash advance to the sellers in lieu of those receipts.

Any fund received through a business cash advance is not a loan, it is a cash advance paid against Visa or Master card merchant account receipt and these amounts are paid back through the merchant account itself.

Prerequisites for a Small Business Cash Advance

  • The business must accept Visa or Master Card as a mode of payment
  • The business must process a payment of $1500 or more in a month
  • The business should have been there for at least 2 years.
  • Credit card statement and bank statements for 3 month for seasonal business and 12 months statement for non-seasonal business should be available.

The biggest advantage that the cash advance business offers to the businessmen is that they are not personally liable to repay a small business cash advance. Most retail store front and small business accepts credit cards as a form of payment. Rather than using the personal credit or personal collateral, personal guarantor etc to get a small business cash advance the owner can sell his future credit card receivables at a discounted price to the cash advance business companies. This is pretty much similar to factoring, except in this case your credit card receivables are factored rather than the business-to-business invoices.

Cash advance businesses get repaid through future Visa and Master Card sale. Other payments received through cash check or other cards are left with you and only the Visa and Master card payments are used for repayment. There are no fixed payment schedules for business cash advance and they get repaid automatically when the merchant has a Visa or Master Card Sale.

Unlike venture capitalist systems, cash advance business would not take equity ownership of the company and the company is free to use the business cash advance for any usage that they see fit.

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