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The Differences between Traditional Loans and a High Risk Cash Advance

The reason a business is categorized as being high-risk is typically based on these two conditions: it either operates within a high-risk industry and/or there is a potential risk of financial failure. The problem for businesses is that banks and merchant account providers consider a high level of chargebacks, refunds and returns and credit card fraud as even more reason to categorize businesses with these challenges as high risk. Companies within industries that experience high numbers of fatal or nonfatal accidents are also considered as such.

In our 21st century business environment, brick-and-mortar retail, electronic merchants, start-ups and existing businesses seeking growth through the Internet struggle to secure the funding they need. If a company has gone through bankruptcy or have had their debt “charged-off”, the situation is even more difficult – if not impossible.

The traditional loan process with a traditional lender like a bank typically makes businesses run around in circles when applying for funding. The seemingly endless submission of business plans, balance sheets, financial statements, tax returns and credit histories can be overwhelming. Once this task is finally completed, a business must wait for weeks or even months for a loan committee to reach a decision. Unfortunately, all too often, the answer comes back as a nonnegotiable “no”. According to a Pepperdine University study, 60% of all bank loan applications are turned down.

If this has already happened to you, don’t despair. Traditional lenders are not the only option you have to get your business off the ground. High risk cash advances from online providers offer businesses a chance to secure the funding they need without the endless restrictions and exhausting requirements. High risk, online providers – like FAM – understand what high risk businesses face; they specialize in working with high risk business models.

Unlike a bank, a cash advance is not focused on a business’ total assets. Instead, a high risk cash advance focuses on the future sales of a business and the value of a business’ account receivables. In addition, the providers helps you to processes your credit and debit card transactions in order for you to repay the cash advance. It also offers your business flexible cash remittances that adjust to your revenue. In the event that your business experiences a slow week, your remittances will reflect the decrease in revenue.

The application process for a high risk cash advance is also much simpler compared to the process of traditional lenders. A relatively short form is provided for you to fill out. This form is quick and painless, and there are no upfront costs or collateral requirements. Instead of waiting weeks or even months, you will receive your answer within a day or two. In as little as seven working days, your business can receive the funding it needs to get back on the road to growth and success.