Insights and tips when applying for a business cash advance

Insights and tips when applying for a business cash advance image

Like with any type of financial product there are plus points and there are some less favourable. This blog is here to give you the insights into the business cash advance product so you can make your own informed decision. The best way to really understand the costing around any business loan product is to ask for a quote and a breakdown of the process and any potential hidden charges or fees. Ask these questions upfront and you will have a confident understanding when you want to move ahead.

Using a Brokerage? Check there is nothing hidden

The first thing to look at is the application process. You are not using a brokerage service that may want to charge you a fee for using their services. Some do and it can come as a bit of a shock later on through the process. Check that the service or application process is free and there is no obligation to continue with the service after the quote is presented.

All business cash advance lenders who we work alongside offer a free no obligation quote and our application process is also free to use and there is absolutely no pressure. We actually prefer to give you as much information as possible so you feel confident that yo are making the right choice.

When you’re applying for a loan with poor credit

It’s very common for a business or individual to have a glitch on their credit history at some point somewhere down the line. It has happened to many business owners that we work with. Most lenders don’t take your credit history into account but what they do appreciate is you telling them about any adverse credit blips on your file.

Why use a BCA over a traditional form of business finance?

Many mainstream lines of business finance are designed around a traditional APR calculation. You will find that with these type of loans you are required to repay a set amount each month to repay the loan. This figure may include fees, charges and of course the APR for any interest due. A BCA works differently in that your loan value is repaid as and when you make sales on credit and debit card transactions you make with your customer.

With a BCA there is one set repayment value that is agreed beforehand with the lender. There are no early or late repayments charges, hidden fees or extras. You repay a percentage of each future sale to repay the loan. For example, it could be 10%, therefore, you make a sale of £100 and you keep £90 and £10 is repaid off your advance. This type of loan product can work particularly well for businesses who may have seasonal sales or see their cash flow fluctuate on a month by month basis.

What sort of deal should I expect from a lender?

Your credit and debit card sales volume usually depict how much a lender is willing to advance. It will usually be a figure similar to that of your monthly card turnover. We do see advances of up to 150% of monthly card sales. There are also some lenders who now take your total business turnover into account when calculating the advance so you may find this proposal figure could be higher. The repayment value is also calculated by something called a factor rate. Each lender may offer a lower or higher factor rate so it’s advisable to use a service such as ours to make sure you are finding the best deal.


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