Business Cash Advance
Cash Advance is a business lending model used by many P2P lenders. Frequently, small businesses will have cash flow lapses due to unpaid invoices or other problems. Many lenders offer individual cash advances paid back with future revenue or like revolving lines of credit.
Loan Types: Invoice Factoring, Line of CreditAvailability: USA (SMEs with Unpaid Invoices (B2B Only), Or SME’s Requiring Line of Credit)Securities: Against Unpaid Invoices, Or Unsecured Line of CreditLoan amount: $5,000 – $50,000Interest: APR: 30% to 50%Overall Rating: Quick and Smooth 3.8 / 5.0 About BlueVine BlueVine is an American answer to the ecommerce line of credit movement led by British companies. Based in Palo Alto, California, the company exists to help businesses finance the sometimes 30 to 60 day gap between services
Loan Types: Small Business Loans Availability: USA (Only Established/Strong Businesses with FICO Score 500+) Securities: Unsecured – Personal Guarantee Loan amount: $5,000 to $250,000 ($20,000 For Revolting Credit Lines) Interest: APR: 20% and up. Line of Credit Interest: 30% to 36% Overall Rating: High Reliable & Efficient 4.6 / 5.0 About OnDeck Founded in 2006, OnDeck has supplied business loans to thousands of small-to-medium sized US companies. It is one of 2 public companies of its kind (ONDK: NYSE), which also
Loan Types: P2P Lending Availability: USA, Small businesses Securities: Unsecured Loan amount: $15,000 – $300,000 Interest: 5.9% to 25.9% Overall Rating: Superb 4.0 / 5.0 About Lending Club Lending Club originated much of the business model that has become Peer-to-peer lending in the United States. Founded in 2006, the company became the first business of its kind to register its loans as securities with the SEC. At the end of 2014, Lending Club became the year’s biggest tech IPO, and has
Loan Types: B2B Loans Against Unpaid Invoices, Line of Credit Availability: USA (Merchants with Unpaid Invoices or Those Looking for a Flexible Credit Line) Securities: Unsecured Loan amount: $10,000 – $100,000 Interest: Varies: by product. 4.66% to 79.8%. Overall Rating: Most Effective 4.9 / 5.0 About FundBox FundBox is one of a group of US B2B lenders in business to help companies maintain cash flow while awaiting outstanding payments. Unpaid invoices are a problem for small businesses who may wait
Loan Types: P2P Lending Availability: UK Securities: Unsecured Loan amount: £1,000 – £25,000 Interest: 7.2% to 16.7% Overall Rating: Experienced 4.1 / 5.0 About Zopa Founded way back in 2005, Zopa was ostensibly the UK’s first P2P lender. Today, the company is among the world’s largest. Based in London, Zopa is backed by Benchmark and Wellington Partners. It is that rarest of P2P lenders: a company available to people without lots of money, that doesn’t have sky-high rates and dubious
Loan Types: Small B2B Loans Availability: UK Securities: Unsecured Loan amount: £1,000 – £50,000 Interest: 4% – 14%, 1 month – 6 months Overall Rating: Quick! 3.9 / 5.0 About iWoca Originally geared toward small web merchants, iWoca has expanded its lending platform to meet the needs of nearly all UK businesses. Since its founding in 2012, iWoca has become established in the UK ecommerce market. iWoca balances convenience, security, and service, quickly gaining ground in a growing financial market. Sole
Loan Types: Merchant Cash Advance Availability: UK (Accepting Payments By Card) Securities: Against Invoices Loan amount: £2,500 – £300,000 Interest: Not Fixed, High Overall Rating: Helpful 3.7 / 5.0 About Liberis Liberis is a strong lender with a simple business model. They quickly approve and finance business operations for many reasons. Businesses pay them back by giving them a portion of daily credit card sales. On days where they make less, they contribute is less, until the balance is paid. Businesses
Loan Types: B2B Business Lending Availability: UK and USA Securities: Unsecured Loan amount: UK – £1,000 to £40,000; US – $2000 to $100,000 Interest: US – 1 to 13.5% fees for the first two months, 1% thereafter; UK – 68% representative APR, 2%-11% fees for the first month, 4% thereafter Overall Rating: Mediocre 2.4 / 5.0 About Kabbage Kabbage has been expanding out of Atlanta, Georgia since 2009, lending money primarily to web merchants. They were an early American lender to
How Does Merchant Cash Advance Work?
The three businesses listed differ somewhat in the way they manage their cash advance model. But the underlying mechanism is the same. Money is quickly loaned to a qualifying business, on the basis of future funds they are expected to receive, usually as invoice payments or regular income.
When unsecured, businesses are typically well-vetted to make sure that they are unlikely to default. As interest is usually very high, businesses must pay loans back quickly in order for the service to be affordable, though this is understood from the beginning.
What Businesses Can Benefit Most From a Cash Advance?
Any business that has trouble maintaining operations, investing in important expansions, or funding businesses initiatives due to unpaid invoices or other cash flow issues will likely benefit from the cash advance model. These include some of the smallest businesses, as long as they are equipped for credit payment and maintain business or accounting software to communicate with the lenders’ systems.
Is Early Repayment Possible With Cash Advances?
Early repayment is almost always permitted without penalty. If not, a potential borrower is encouraged to find a different lender, as this form of financing is only affordable if it is able to be paid off quickly.
What’s the Difference Between Cash and Invoice Advances?
The two are distinct. There are companies that offer both, but most offer one or the other. In the example above, Liberis is the only Cash Advance P2P lender, offering simple loans for many purposes paid off with a daily percentage of future sales.
It is a simple model for borrower and lender. The other two company examples offer revolving lines of credit, against which individual loans may be instantly taken out to pay off new invoices with pending balances. These are quickly repaid when a client pays off the invoice in question, usually after 30 to 60 days.
Note: We list companies offering either cash advance or invoice advances (also known as invoice factoring).