Business Cash Advance and Business Loan Comparison


Presentation Description

There are significant differences between business loans from a bank and a business cash advance from traditional lenders. See a side by side comparison of the two financial products to help determine which type of financing is right for your small business. For more information on traditional business loans visit any major bank and for more info on a business cash advance see this leading resource at


Presentation Transcript

Business Cash Advance vs Bank Business Loans:

Business Cash Advance vs Bank Business Loans Shield Funding helps make you r business financial decisions easy. For more information visit A Shield Funding Finance Report

Application Submission Process:

Application Submission Process Business Cash Advance application via phone, fax, or email No face-to-face meetings required Bank Business Loans n o online application f ace-to-face meetings required

Application Documents Required:

Application Documents Required Business Cash Advance 3 months recent bank statements 3 months merchant processing statements 1 page application Basic business/personal identification

Application Documents Required:

Application Documents Required Hazard/Environmental Information Tax History and Debt if any Company Balance Sheets Profit and Loss Statements Projected Profitability Explain Slow Business Periods Marital Documentation if Necessary Life Insurance Verification Any Legal Issue Documentation Reasons for Borrowing All Partner Documentation Business Debt Schedule Personal Financial Statements Business Financial Statements Real Estate Rent Schedule Business Tax Returns Individual Tax Returns Business Profile Management Profile (Work Experience/Resume) Projections for Business Expansion Additional Debt Obligations Bank Business Loans *additional documents vary from bank to bank

Credit Requirements:

Credit Requirements Business Cash Advance Approvals based on business monthly revenues FICO score 500+ Bank Business Loans Collateral type/amount affect credit requirement FICO score 700+ (should be closer to 800)

Collateral Requirements:

Collateral Requirements Business Cash Advance No collateral required Bank Business Loans Collateral required/ blanket lien on assets borrow up to 70% of accounts receivable borrow up to 40% of inventory (type matters) borrow up to 100% against CD deposit

Personal Guarantees:

Personal Guarantees Business Cash Advance No personal guarantee required Bank Business Loans Personal guarantee almost always required subject to forfeiture of assets for loan default

Business Ownership Requirements:

Business Ownership Requirements Business Cash Advance At least 3 months (preferably 6 to 12 months) Bank Business Loans A minimum of 2 years ownership of business

Funding Amounts Available:

Funding Amounts Available Business Cash Advance Business Cash Advance $2,000-$1 million Bank Business Loans Bank Business Loans $25,000-$2 million

Main Approval Factors:

Main Approval Factors Business Cash Advance legal owner or partner of a business $2,000 mo. credit card sales for 3 months Bank Business Loans Close to 800 FICO score required Collateral more than value of loan Strong and consistent year over year business financials Establish proven profitability plan Strong and consistent year over year personal financials Substantial personal wealth and liquidity industry/product type and current legal/debt issues *factors like bank relationship and individual bank standards may apply

Term (Length of Time to Payback) :

Term (Length of Time to Payback) Business Cash Advance 6 months up to 2 years+ Bank Business Loans 3 years (5 years for 100% backed by CD)

Fees for Borrowing:

Fees for Borrowing Business Cash Advance No application fees or closing costs (some may charge) Bank Business Loans closing fee of half percent of total financed a pplication fee can vary from bank to bank o ther possible additional costs such as: flood certificate title and appraisal fees insurance costs administrative filing fees *costs and requirements can vary from bank to bank

Restrictions on Funding Uses:

Restrictions on Funding Uses Business Cash Advance n o restrictions disperse the money any way you see fit Bank Business Loans Restrictions on funding usage detailed explanation/plan on usage of funds and may require supporting documentation

Turnaround Time (Funding Received):

Turnaround Time (Funding Received) Business Cash Advance c an occur same week application is submitted Bank Business Loans 1 to 3 months+ after submission creation or acquisition of necessary paperwork can extend time c orrections/updates to submitted paperwork can extend time thorough analysis and verification process of each document submitted can extend time

Actual Business Cash Advance Example:

Actual Business Cash Advance Example Business Cash Advance Business Average Monthly Revenues: $ 53,000 Rate: 1.29 Estimated Payback Term: 12 Months Credit Card Revenue Applied to Payback: 16 % Total Amount Borrowed: $ 78,270 Total Amount Paid Back: $ 101,672.73 *The estimated length of time to payback the advance is based on the average monthly revenues. This helps lenders establish a percentage to be deducted from credit card sales that works for the business and it also creates the expected payback time. This however is only an approximation and may be longer or shorter depending on sales volume, but there are no penalties for either scenario., and the total payback never changes because there is no interest or accruing debt.

Actual Bank Business Loan Example:

Actual Bank Business Loan Example Bank Business Loan Estimated Payback Term: 36 Months Interest Rate: 8% Closing Costs: $391.35 Monthly Interest Payments: $278.53 Total Monthly Payments: $2,452.70 Total Amount Borrowed: $ 78,270 Total Amount Paid Back: $88,688.45+ * Does not include application fees and possible additional costs such as flood certificate, life insurance, title and appraisal fees, administrative filing fees, and other potential expenses necessary for approval

Shield Funding:

Shield Funding As a leader in the small business financing industry Shield Funding makes every effort to see that their clients are well informed when it comes to making important business financial decisions. Shield Funding has been providing small business owners with working capital for over a decade and is proud to be a financial services company that business owners can rely on and trust. For more information on our business funding programs visit our company website. HTTPS://SHIELDFUNDING.COM

authorStream Live Help