Searching for funds is not a task that takes place only in the beginning of one's entrepreneurial journey. After finally turning all of your plans, and ideas into something tangible and getting your business on its feet, the need for working capital still remains. Occasionally, however, the only way to acquire that working capital is through seeking out additional sources of funding.
In this case, the questions arise, "Should I use the traditional method and seek a business loan, or should I pursue an alternative route and apply for a credit card advance?"
When faced with this decision, it is best to consider the framework of both a business loan and a credit card advance to determine which option better suits you and your business needs.
If you were to visit your local bank and inquire about a business loan, you would find that it is important for a borrower to have collateral, a credit score of 700 or higher and a business history of at least one to three years. In addition to these requirements, during the business loan application process, a borrower must set appointments, make pitches, and present business plans.
To be eligible to receive a credit card advance, excellent credit is not a necessity. We simply require that your business processes a minimum of $2,500 in monthly credit card sales, and we only require a business history of at least four months.
Some disqualifying factors for credit card advance approval include having unresolved bankruptcies, tax liens, or having less than a year left on your business' lease, simple requirements compared to those of a bank business loan.
Business savvy professionals use business loans to finance expansion, renovation and/or improvement; anything that will in the long run, make a business better and more profitable. A credit card advance can be used for the very same purposes and more.
The lengthy process of receiving a business loan makes it less convenient during cases of business emergencies. Banks want borrowers to be capable of repaying a business loan in a timely manner. When lending money, a bank's main concern is the probability of reclaiming the money they lend. A potential borrower who shows a sense of urgency when applying for a business loan may be viewed as a high risk, making their business loan requests less likely to be approved.
Therefore, if you find yourself faced with unexpected business expenses, applying for a business loan through a bank is probably not the most feasible idea.
The credit card advance process is much faster. When unexpected business expenses appear, you could have a credit card advance in your bank account in seven business days; allowing you to take care of your financial emergency immediately, before it grows into an even bigger problem.
