The Ultimate Guide to Funding with Business Finance Advance

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When to Use Business Finance Advance to Fund Your Business

So, you’ve found yourself in a bind.

Either your business is tight on cash during a dry spell, or a costly opportunity has presented itself that you just can’t sit on.

Either way, you need funding, and you need it quick.

First, you’ll need to know what you’re getting yourself into. By and large, no matter how qualified your business is to borrow, quick business funding is going to be expensive business funding.

But that shouldn’t stop you from seeking a small business loan if you really need it right away.

The quickest, most accessible—and often the most expensive—business financing option for business owners who need fast working capital?

The business advance.

And as banks have tightened their requirements more and more for small business to receive funding from them, so too have business advances become more and more popular.

Business Finance Advance is one of the many who’ve answered the growing demand for this quick, expensive business financing. Business Finance Advance works like an online broker for cash advances. They take flexible repayments through your business’s credit card transaction accounts receivable.

Are you considering securing business funding from this alternative lending broker?

In this guide, we’ll walk through everything you need to know about Business Finance Advance before you work with them.

What is Business Finance Advance?

Business Finance Advance is an online loan broker that helps connect traditionally under-qualified businesses with alternatives to bank business loans with one stipulation—they only fund cash advances.

Because Business Finance Advance is a company that prides itself on quick, accessible business funding, it limits itself to providing the quickest, most accessible type of business funding.

Be sure to keep in mind that “quick and accessible” often translates to “expensive,” in the context of business financing, unfortunately.

As a result, the funding that Business Finance Advance is able to connect its customers with is often incredibly expensive.

Nonetheless, sometimes quick, accessible funding is the only option.

In that case, you might have to swallow the cost of a cash advance and chalk it up to the price of running and growing your business.

However, if you find yourself and your business in a situation like this, there are almost always options that will be more affordable than cash advances.

But we’ll let you decide that for yourself.

Let’s take a look at all of the necessary info for you to decide if Business Finance Advance is the right fit for your business financing needs.

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What Kind of Funding Does Business Finance Advance Offer?

Business Finance Advance connects customers solely to business cash advances, or merchant cash advances.

The cash advance is a type of funding works a bit like a payday loan for businesses.

The lender will advance you a lump sum of working capital, and you will pay them back gradually over time, plus fees. The repayment will take place through a small, automatic percentage taken from all of your business’s credit card accounts receivable. The advance provider will take these percentage payments until your advance plus its fees are paid off.

However, merchant cash advances aren’t really loans—the provider is technically just buying advances from your business. Because of their different status, there are fewer regulations on cash advances.

As a reminder, cash advances are some of the most expensive business funding options you can find on the market. When you apply for the cash advance, Business Finance Advance will quote you the percentage of each credit card transaction they will take out until your advance and fees are paid in full.

Your cash advance will also come with a factor rate, depicting the cost of your loan. This factor rate will seem small, but it will eventually add up to a huge APR.

All in all, as cash advances go, the products that Business Finance Advance offers are run-of-the-mill expensive business financing.

That said, they do fund quickly, and they have well-reviewed customer service, so if you‘re set on looking for cash advance financing that you’re okay with being expensive, Business Finance Advance could be a good choice to look into.

Who Can Get Funding Through Business Finance Advance?

Business Finance Advance’s minimum applicant requirements are, well, minimal.

And these minimal requirements are why they exist in the first place. They work in order to help less-qualified borrowers secure funding for their businesses.

Their minimum FICO score? There is none.

Their minimum business age? They don’t have one of those, either.

The only criteria your business has to fill are:

  • You accept credit card transactions.
  • You make at least $4,000 in credit card sales every month.

And that’s it.

Does your business fulfill these 2 criteria? From there, it’s just a question of if you’ll be able to afford the loan you qualify for through Business Finance Advance.

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What Are the Steps to Funding with Business Finance Advance?

So, what does the funding process with Business Finance Advance entail, exactly?

We break down the steps of working with Business Finance to the following.

    The Application

    You’ll be able to fill out the Business Finance Advance application through their website or submit it through email or fax.

    Be sure to note that you’ll also need to provide a few documents in this process, as well.

    Underwriter Review

    This is when Business Finance Advance will decide how much they will extend you in your advance.

    Normally, they’ll come up with multiple advance values that they’ll offer to you and you’ll be able to choose from them.

    Offers Within 48 Hours

    After you submit your paperwork, a member of Business Finance Advance’s sales team should contact you within 48 hours.

    They’ll present the offers that the underwriting team came up with for your business.

    Paperwork for Selected Offer

    After you’ve selected which of the offers you’d like to accept, Business Finance Advance will forward you funding contracts and merchant processing paperwork either by fax or by email.

    You’ll just have to initial this paper work and provide any necessary additional paperwork they might request.

    Site Inspection

    Next, a Business Finance Advance representative will need to make a quick trip to your business to confirm all the information you’ve submitted during the application process.

    The underwriting team will take care of all the arranging, and the visit shouldn’t last more than 15 minutes.

    Credit Card Terminal Boarding

    After the advance is all set in stone, Business Finance Advance will need to make another quick visit to “board” your business’s credit card terminal.

    A Business Finance Advance rep will come either before opening or after closing to set your credit card terminal to make it possible to deduct the agreed upon factoring rate for each card transaction.
    Again, this visit will only take 10 to 15 minutes.

    Confirmation Call

    After your business’s new credit card terminal successfully works 3 times within normal business hours, you’ll get a call from Business Finance Advance to confirm the amount of money that they will wire to your business.

    Receive Funds

    When you verbally confirm the advance amount during this phone call, the advance will be wired to your business’s checking account, simple as that.

    From there, Business Finance Advance will automatically deduct your advance’s repayment from your credit card transactions at the agreed upon factor rate. These deductions will happen until your advance is paid off in full.

The Advantages and Disadvantages of Funding With Business Finance Advance

What Are the Advantages of Funding With Business Finance Advance?

So, now that we’ve covered what working with Business Finance Advance entails, let’s take a moment to dwell on what this online broker gets right.

    High Approval Rate

    According to their website, Business Finance Advance’s approval rate is an astounding 95%.

    That said, Business Finance Advance is dealing in the type of financing that’s the easiest to get approved for.

    We get it—especially if you’ve been previously denied for business funding, the prospect of a 95% approval rate is exciting. It’s easy to get caught up in the prospect of receiving a lump sum advance into your business’s accounts, and quickly at that.

    However, we can’t stress enough that it’s crucial to take a moment to consider if your business can afford this quick, expensive funding before you get swept into unaffordable debt.

    Quick Funding Turnaround

    Their quick turnaround is another huge draw for funding with Business Finance Advance.

    The 8 steps we walked you through of Business Finance Advance’s funding process? According to their website, they’ll take care of all of that in around 8 days.

    Getting an offer in under 48 hours isn’t bad either.

    But, as a reminder, quick funding is expensive funding. Unless your business needs a lump sum right this moment, consider cheaper options than the cash advances that Business Finance Advance will offer you.

    Well-Reviewed Customer Service

    Despite the flawed nature of the products they offer, Business Finance Advance does get plenty of stellar reviews on their customer service.

    Because they’re able to fund quickly, often, and kindly, they make a lot of customers happy.

    Ebb-and-Flow Payments

    Because your payments will be portions of your credit card accounts receivable, they will ebb and flow with how your business is doing.

    So if business is slow and you have fewer credit card transactions, your payment will be smaller. On the other hand, if business picks up and you have a higher volume of credit card transactions, your payments will be a bigger sum.

What Are the Disadvantages of Funding With Business Finance Advance?

Those advantages are all well and good, but these perks of working with Business Finance Advance ultimately cause its one, huge, pitfall.

Essentially, thanks to all the pros that Business Finance Advance offers, there’s one huge glaring con that overshadows them.

Buy and large, we suggest that you find a different funding source because…

    It’s Really Expensive

    The bottom line? Funding with Business Finance Advance is just really expensive.

    Yes, their funding is accessible and quick. But that’s by nature of them only offering quick and accessible funding, which—it really bears repeating—is almost always way more expensive.

    Plus, every time you have a surge in business, the factor rate will become a larger sum. That means every happy month of good business will be hampered by bigger loan payments.

    With Business Finance Advance, you pay a lot for speed and accessibility.

That said, if you find yourself and your business in a time-sensitive financial bind, you don’t always have to resort to a merchant cash advance.

There are many quick, accessible funding options out there, and some of them won’t cost you an arm and a leg.

Let’s take a look at some other funding options that are comparably easy-to-get, but will likely end up being more affordable than Business Finance Advance’s funding options.

What Are Some Alternatives to Business Finance Advance?

Business Lines of Credit

Business lines of credit are great quick funding options that end up being much more affordable than cash advances.

Business lines of credit function a lot like business credit cards—your business will get access to a line of credit and will only have to pay back the amount you draw from the line.

Business lines of credit often have lower APR’s and less-regimented payments schedules than business credit cards. Plus, you’ll have access to cash, whereas a credit card would charge you extra for access to a cash advance.

However, business lines of credit don’t offer the rewards that business credit cards do.

You’ll be able to secure a business line of credit in as little as one day, and APR’s will range from 7% to 25%.

Lenders like Kabbage and Fundbox, among many others, offer business lines of credit.

Short Term Loans

Another option for quick financing, short term loans can get business funding in your hands in as little as one day.

You’ll just need a FICO score of at least 550, 6 or more months of business history, and at least $100,000 in annual revenue as minimum qualifications for a short term loan. And though these criteria make short-term loans a little less accessible than merchant cash advances, their APRs are much more affordable at as low as 10%. However, short-term loans can get more expensive depending on your qualifications as a borrower.

Short term loans work like scaled-down versions of traditional term loans. You’ll receive a quick, lump sum loan and pay it down plus interest through daily or weekly payments over 3 to 18 months.

Lenders like OnDeck and CAN Capitalfund short term loans for qualifying borrowers who need working capital fast.

Business Credit Cards

If you need easy-to-get funding and you need it quickly, then business credit cards could be a great alternative to a merchant cash advance from Business Finance Advance.

You might be surprised to see business credit cards as a cheaper alternative for funding, but that’s just how expensive merchant cash advances can get.

 

If you’re looking for quick and easy-to-get funding that will end up being cheaper than Business Finance Advance funding, then consider the Capital One Spark Classic for Business.

The minimum FICO score requirement for the Spark Classic is 550, and it’s the only unsecured business credit card on the market that’s available to business owners with average credit.

All in one, the Spark Classic is an opportunity for credit-challenged business owners to access a line of credit and an opportunity to build credit in order to access more premium business financing in the future.

Our advice?

Use the Spark Classic to get a quick line of credit to pay off from month-to-month. After you spend responsibly with the Spark Classic, find more substantial business funding with your improved personal credit score.

After you build credit with the Spark Classic, you’ll be able to access more affordable funding than a merchant cash advance.

Does this like a good plan for your business?

The Bottom Line on Business Finance Advance

What’s the bottom line for Business Finance Advance?

Put simply, you can find better, more affordable business financing than they can offer you, even if you are in bind.

Because they’re so costly, merchant cash advances like the ones that Business Finance Advance offers should be your absolute last resort.

Even then, if you’re in a place where you’re considering taking on debt in the form of a merchant cash advance, think long and hard about if you really need business financing fast.

If not, why not take time to see some slower but more affordable funding through?

Better yet, look into ways to improve your credit, like a business credit card, and secure more affordable business funding after you’re able to build your creditworthiness.

Ready to find quick, affordable funding?

 

Maddie Shepherd

Maddie Shepherd is a former Fundera senior staff writer and current contributing writer for Fundera. 

Maddie has an extensive knowledge of business credit cards, accounting tools, and merchant services, but specializes in small business financing advice. She has reviewed and analyzed dozens of financial tools and providers, helping business owners make better financial decisions. 

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