How Does Non-Bank Lending Work?

Is your business in need of a cash injection? Let’s be honest, running a business is neither cheap nor easy. Sometimes, even the best run business needs a bit of extra money, and the best way to get that money is often to take out a Business Loan. Yet finding investors or taking out loans can be long, arduous hassle. The application process for a non-bank lending, on the other hand, is often quick and painless.

Never heard of a cash advance for businesses, or unsure of how they work? It’s easy to confuse a cash advance with a loan as both offer ways for businesses to raise capital. However, the subtle differences between them are essential. Business loans, by their very nature, often carry high interest rates and burdensome fixed monthly payments. Businesses, meanwhile, have to deal with ebbing sales and other market conditions. For many businesses, a loan can be as much a burden as a help.

A cash advance, on the other hand, is much more flexible, and anyone who has managed a business knows that flexibility is very important. With a cash advance, you agree to allow the company that fronted you money to take a certain percentage of your credit card sales each month. Suffer a tough month? Sales drop? No worries, with a cash advance, your payment will actually drop for that month! Your credit won’t be hurt, and you won’t be dragged into court for missed or insufficient payments.

Often, cash advances are more affordable for businesses. Since money is taken directly from your future sales, your sales themselves can act as a form of collateral. For the company fronting you money, this is very important. Collateral lowers risks and thus makes it safer to front the money. This means that cash advances can actually be cheaper than traditional bank loans.

Not only that, but since risks are lower, it’s easy for businesses with poor credit ratings to take out a cash advance. Have you been struggling through some tough times, or did a previous loan turn sour? While banks might be turning you away, there is a very good chance that we can work with you.

The cash advance process is often much quicker than a traditional loan process, and frequently involves less paperwork. Banks tend to scrutinize potential clients very closely, and often take a long time to deliberate. You might need cash now, but with a bank loan you might not get that cash for weeks! Reaching out to investors? Even more scrutiny and often slower decisions. Luckily, with a cash advance, it usually takes only a few days for your application to be approved and for the money to be distributed.

Again, it all comes back to the model. Since the cash advance company can take a slice of your future revenues, they can move more quickly. Of course, you’ll have to provide some paperwork and information, such as sales numbers, how long your business has been open, and other pieces of vital information.

How can you spend your cash? That’s mostly up to you. We don’t get into the habit of trying to manage our clients and their businesses. After all, you’re the expert, not us. Banks, on the other hand, are often far more nosy, and while they might be well-intended, it often ends up being a major burden for companies. As you can see, cash advances carry many benefits.

Still have more questions? Get in touch or fill out an application, and we’ll be able to go over all of the details!

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