Small sized business establishments thrive on two major sources of funding. They are known as working capital loan and business cash advance. At times, business entrepreneurs find them to be real lifesavers. Capital loans and business cash advances are utilized by startup ventures or existing firms for further diversification. The following facets will show you the major distinctions between the two funding methods.
While taking the case of business cash advance you can see that, it is quite similar to payday loans. The only major difference comes in the details required for the application procedures.
You do not have to provide any identity proof, salary slips, or your credit check report to get a business cash advance. You can get it directly from a lender and the repayment can be done using your master card or debit card. This is often found to be a most convenient and trouble free method. You just need to ensure prompt repayments. Repayments are also done by deducting a certain percentage of every successful sale made by the company. This will continue until the whole amount is completely repaid.
Coming to working capital loan, we can see that it is more of a conventional method. Usually business firms use such funds for acquiring additional funds. To get such loans, the methods are not that easy either, as compared to that of business cash advance.
There are numerous criterions for working capital credits and you need to qualify for the loan amount. To get capital loans you need to provide a flawless credit report and a trouble free financial record. Furthermore, you will be asked to pledge sufficient collateral against the required amount. In addition, the authorities will carry out a detailed analysis on the all documents and details produced by your side. The procedures can be time consuming and you cannot always guarantee approval of loans.
So it is always recommended to opt for the right mode to acquire additional funds. For that, you can avail the advice of expert financial advisors. They will tell you which method suits you the best. Besides, this will be beneficial to avoid unwanted troubles in the future as well.
Thus with the above-mentioned details you can very well see the major differences between the two methods. Nonetheless, whether it is a working capital credit or a business cash advance, timely and prompt repayment matters the most.