Working Capital Loan or Business Cash Advance – which one is better

Both of these methods are used for working capital financing but which one is better will be clear from following discussion

• Qualification ease: Working capital business cash advance is difficult to obtain because for working capital funding financing bodies factor in the credit score of the borrower, available collateral and various other factors. However, most small businesses would easily qualify for a business cash advance as all you need is certain amount of credit card processing in month.
• Processing Time: It’s a week or more for working capital loan to get approved as a lot of paper work is involved. While application for business cash advance is processed much faster (pre-approval in 24-72 hrs) and the paper work is also not much. In fact with companies like MerchantCashAdvance processing is done online.
• Ease of Repayment: A business cash advance is never tied to a fixed repayment schedule. The repayment is done from credit card sales receipts and the businesses generally do not feel the pinch. Working capital loans on the other hand would have a fixed repayment schedule and the borrower would need to repay the amount according to the schedule. If the borrower fails to repay the working capital business cash advance, it might affect his credit score and he also stands the chance of losing his collateral.