A stable and steady financial flow is a major factor that contributes to the success of any business. Whether planning a start-up or expanding the existing business, adequate cash on hand can only help in achieving the business plans. Today there are several funding options available for small business owners which include both secured and unsecured loans. Many business owners and turning to unsecured loans as the traditional bank lending are time-consuming, has endless paperwork and above all needs a collateral to back up the loan.

Whereas unsecured loans can be applied and availed easily from non-bank lenders at competitive interest rates and involves no collateral. Cash advance is an unsecured loan that is a viable option for small businesses and new start-up which can be availed easily even with low credit score. Not many business owners are aware of the procedure involved in obtaining a cash advance for business till the need arises. Although availing cash advance is easy and does not require a lot of documentation, the following is the step-by-step guidance of the procedure.

Step #1

Eligibility Criteria

Know the criteria of the cash advance lenders in advancing the loans. Different lenders may have different criteria that need to meet the borrower to avail a cash advance. The general and basic criteria requirements remain the same for almost all the lenders.The following are the general criteria that you should meet when applying for a loan.

  •    The loan should be applied for an established business purpose. The business must be eligible to avail cash advance in the grounds of the size, use of cash advance proceeds and the nature of the firm. Gambling, speculative, pyramid sales, real investment, and lending businesses are not eligible to avail cash advance.
  •    A business owner or partners need to be of good character and should have experience and expertise in running the business with good credit history.
  •    The repayable ability of the loan the third basic requirement to avail a cash advance.This can be either personal equity investment in the business or any for of collateral.

Step #2

Documentation

The basic documentation is required to be submitted while applying for cash advance which include personal and business credit history; current financial statements and projected financial statements, detailed business plan, projections of cash flow and personal guarantee to repay loans by all the business partners.

Step #3

Market Research

Research on the market for lending interest rates and fees before actually approaching lenders. Having an idea of the interest rates of the lenders on the market, you will be able to find the one that best suits your fund requirement with minimal efforts and also negotiate better on the rates and fees applicable on the cash advance for your business.

Step #4

Identify the lenders in the market that will be able to lend the size of loan required by you. There are various non-bank lenders and lending institutions that cater to the cash advance requirements of different size of businesses.

Step #5

Application

Once you have decided on the lender , you need to fix an appointment with them and schedule a detailed discussion of your cash advance requirements , eligibility criteria , interest rates, fees applicable, repayment terms and conditions, percentage of repayment, repayment tenure and other important things before you actually submit an application to get approved.

Step #6

Approval

Once the cash advance application is successfully presented with all the relevant documents, the lender will gather information from other online sources of your finance and business. Once the lender is satisfied with the details and is sure of your repayment ability will approve the loan and intimate you about the same and will ask for the bank details for the funds to be deposited.