Businesses at any stage can apply and receive a cash advance. But why would a business need a cash advance, to begin with? A cash advance, or a merchant cash advance is a short-term loan that businesses use to help with operation costs among other things. A common reason businesses take out merchant cash advances is because their initial business loan cannot be refinanced or they are in need of immediate funding to help with costs. Businesses can even look to stack cash advances on top of one another or in other words take out more cash advances while still paying back the initial one. Stacking cash advances can come along with its own problems. This article will talk about the positives and negatives of stacking your cash advances and what people can do to relieve them of overwhelming daily payments to their cash advances.
Applying for a cash advance allows you to forgo the lengthy process of receiving a traditional bank loan. A cash advance gives you funds into your account in a matter of days or sometimes the same day you are approved for it. As mentioned before, receiving a cash advance is an easy way to cover costs in a short amount of time for businesses that need it. Lenders that give cash advances are not likely to put too much emphasis on someone’s credit score. Cash advance lenders look to the business’ cash flows instead of their credit to determine their eligibility. Some lenders are known to approve a business for a cash advance without even looking at their credit score!
Cash advances seem like a great idea initially, but with careful analysis, one can see where they can go wrong. Stacking cash advances can lead to a debt trap where you are taking out more cash advances to pay off your previous cash advances. Another issue is that a cash advance may be a violation of your initial bank loan. Disregarding your bank loan and moving forward with a cash advance could lead to a full refund of your bank loan potentially leaving you out of business. Other problems such as defaulting on your payments and the heavy amounts of stress on your cash flow could lead your business into debt and ultimately a lost business.
If your business is struggling to make the daily cash advance payments, then you may be seeking a solution. EIN Cap has launched a new service that helps businesses alleviate the stacked cash advance payments and out of a debt trap. EIN Cap offers reverse consolidation on your stacked cash advances. EIN Cap will consolidate your cash advances into one easy daily payment so you can focus on running your business and getting a handle on your cash flow. This is an excellent option for any business struggling to keep their head above water with their stacked cash advances.
Visit EIN Cap’s website to find out more about the company and services they can provide for your business.