When running a business, you take charge of your financial health, depending on your abilities. Whether you want to pay off existing debts, buy a business item, or purchase stock, all these activities may require cash you may not have. With this in mind, you must weigh cash advance vs. SBA loan options. If you need more enlightenment to settle on either, here are practical factors to consider beforehand.
The Urgency of Funding
How urgently do you need the money? Do you have enough time to wait? Merchant cash advances have instant approval and fast funding. You can access them online with just a click. On the other hand, SBA loans may take weeks before approval and receipt of the money into your business account. Therefore, it’s advisable to choose the best fit based on the available time and loan urgency.
Your Credit Score
Do you meet the lender’s requirements? How strong is your credit score? While borrowing, your credit history plays a vital role in defining the amount and terms of the funding. Lenders approve cash advances based on credit card transactions and past borrowing history, while SBA loans demand you to meet a specific credit score limit. Hence, choose between cash advance vs. SBA, depending on where you fall.
Loan Limits
It would help if you had a range of the amount you want to borrow. The two options, cash advance vs. SBA, have variant limits, with cash advances having lower limits than SBA loans. Therefore, make your choice depending on how massive your loan expectations are. For instance, if you want to fund one of the substantial business projects, go for SBA loans and vice versa.
Underwritten Interest Rates
Many people dive into taking loans without a second thought about the attached interest rates. Therefore, they incur more than they could if only they took a minute to read through the lending terms. Generally, cash advances impose higher interest rates on borrowers desperate for cash than SBA loans.
If you’re considering taking a cash advance or SBA loan, look no further. Contact us now at Dorra Financial Group to give you the loan type and the financial help you want.