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Loans Vs Cash Advances Vs Factoring

Are you looking for a financial product for your small business? Make sure to choose the right financing option so to get the best for your business needs. With a carefully chosen financial product, you’ll be able to make your situation better and take your business to new heights.

Let’s see how small business financing options differ from each other so that you can make the right decision.

Small Business Loans

  • Small business loans report to the credit bureaus about the credit of your business
  • They require a good FICO score
  • You can be required to use all your company assets as collateral
  • You can get funding in 3-7 days
  • You can use small business loans, e.g., to replace old machinery
  • If you miss a payment, it’ll reported on your business credit

Merchant Cash Advances (MCAs)

This business funding alternative has turned into one of the most popular forms of financing for small business owners. Many choose a merchant cash advance over traditional business funding these days. Many business owners think a merchant cash advance is a short-term loan or a high- interest advance. In fact, it’s just a sale.

  • The quickest solution to get
  • Great for an emergency financial situation
  • Your cash flow history will be required
  • You won’t have to use any collateral
  • Generally, takes about 1-3 days to process
  • Is great for seasonal businesses and restaurants in tourist areas

If you’re interested in business funding for your company, consider turning to First American Merchant, a reputable business loan provider and payment processor that specializes in the high risk sector. offers the lowest possible rates and the best business funding opportunities in the industry, including high risk business loans. If you apply for FAM’s popular Cash Advance, your future sales will be purchased at a discount. Both parties will agree to the amount of sales being purchased and for what discounted cost. FAM is rated A+ by the BBB.


Factoring is a type of finance in which a business would sell its accounts receivable (invoices) to a third party to meet its short-term liquidity needs. Companies that qualify for factoring are typically B2B under unfavourable terms.

  • Great for matching income and expenses
  • Requires actual invoices
  • Receivables and invoices are used as collateral
  • Generally, takes about 2-5 days to process
  • Factoring can help you tackle temporary cash problems

Businesses with invoices will be eligible for factoring, cash advances, or a loan. Businesses that don’t invoice can only get a cash advance or a loan.