To qualify for a Business Cash Advance, merchants must present a filled-out application form, the most recent credit card invoices, and bank statements. For seasonal businesses, lenders will request a full season’s worth of processing checks. Most lenders will require an enterprise that has been in operation for at least six (6) months. Any type of business can actually qualify for a Business Cash Advance; though some lenders would prefer those in the restaurant or retail industries.
Business owners should not hesitate to ask for additional working capital. Often, cash flows may be affected because of overdraft fees and insufficient funds. A good lender will work with the business owner to come up with a safe flat rate percentage fee, so that cash flow will not be affected during monthly payback schedules. Technically, a Business Cash Advance is an ‘unsecured loan’, so lenders also want to feel safe about helping small and medium ventures.
When a merchant takes a cash advance, a Uniform Commercial Code (UCC) is filed against the business; claiming that the lender has a security interest in the merchant’s future receivables. Before the business owner can make another loan, the current one must be paid in full. This ensures that both parties benefit greatly from each other.
To read about the initial underwriting process click here!
