06/29/2016
How is a Merchant Cash Advance different from a loan?
A Merchant Cash Advance is different from a loan in many ways.
Time: a business loan can take between 3-5 months to get your funding whereas you can be funded in 3-5 days with an advance from Snap Advances.
Collateral: a business loan will typically require that you provide some kind of collateral to secure your loan whereas a cash advance does not require collateral.
Approval: business loans require that you have a near-perfect credit record to get approved whereas you can qualify for a Merchant Cash Advance even if you have bad credit.
Convenience: Rather than making monthly payments, a Merchant Cash Advance is paid back automatically as customers use their credit cards at your business or through a daily ACH.
Flexibility: Instead of paying back a set amount each month, you pay a set percentage of your sales each month, so you pay less when you have a bad month and more when you have a great month.
Obligation: Your advance will be repaid within a year, whereas a business loan can go on and on for 5-10 years.
Promise vs. Purchase: An advance is not a loan. Instead of promising to pay back the borrowed amount at a set interest rate, you are selling your future sales for a discounted price.
