More and more talented people are trading in their corporate memberships and starting their own small businesses. However, the atmosphere for small businesses can be hostile depending on what type of business is asking for a loan, the credit rating, and the business’ reputation. As a result, business owners are turning to cash advances as a source of funding to jumpstart their company. But what exactly are cash advances? And how can cash advances help your business?
Cash Advances Are. Short term loans acquired by credit card holders using their credit cards to withdraw cash via an ATM or at a financial institution. Each credit card has a maximum amount of cash that can be withdrawn. For a credit card this is usually the credit limit or a percentage of the limit. If done with a credit card, cash advances apply a 3 to 5 percent fee and have an interest rate higher than the regular interest rate on the credit card itself. Individuals who use cash advances this way should be prepared to repay the advance quickly, as the interest begins to build on the day the advance is taken out.
Merchant Cash Advance. Merchant cash advances are not short term loans, instead they are an exchange. Merchant cash advance companies will provide funds to businesses in exchange for a small percentage of daily credit card income until the cash advance is repaid.
Advantages of First American Merchant Funding (FAM) Cash Advances
FAM is a merchant cash advance provider that collaborates with businesses on the percentage of their sales that will be purchased and for what discounted cost. FAM offers high approval ratings because approvals are based on performance and not credit. In as little as 72 hours your business can be funded without putting your credit or collateral on the line.
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