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Is a Business Cash Advance Different To a Bank Loan?

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Is a Business Cash Advance Different To a Bank Loan?

If you’ve got a business in financial trouble, I’m sure you’re familiar with a business cash advance as an option for financing. The only issue is – can you distinguish between it and a loan from a bank? Maybe you’ve asked yourself “Should I get a loan or business cash advance?” or you’re wondering about the difference between loans, cash advances and factoring.

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It’s all a bit confusing, isn’t it, because they all seem to offer similar things, on similar terms, and you’re unsure whether one is better than the others. So in the interest of clearing things up, today we’re going to talk about the difference between a small business cash advance and a bank loan.

What Is A Business Cash Advance?

A business cash advance is, like the name says, an advance you get from a provider for your business. You agree on an amount with the provider and then start repaying out of the income your business makes from credit card transactions.

What Is A Bank Loan?

A bank loan is a traditional loan you get from the bank in order to help your business. The bank assesses your financial situation and decides whether to approve your application and how much money you can get based on that. The repayment is made in fixed instalments over an amount of time previously agreed upon.

How Are A Business Cash Advance And A Bank Loan Similar?

In order to properly compare the two options, first, we need to look at the similarities between the two and see what they have in common.

How Are A Business Cash Advance And A Bank Loan Different?

We know what the similarities are, but most importantly, we need to learn what the differences are between the two. Let’s take a look at what makes these two financing options different.

Quick Extra Info
Business Cash Advance Bank Loan
How much can you get?
Depending on your needs and circumstances, you can get up to £100,000.
How much can you get?
It depends on the bank and the circumstances, but there are loans that go up to £500,000 or even £1,000,000.
How long does the application take?
The application can be approved in as little as 24 hours and no later than a couple of days. You get the money in maximum 48 hours.
How long does the application take?
The application process is more thorough, and it can take up to several days to get approved and/or get the money in your bank account.
Who can get one?
A business who has constant cash flow and many credit card transactions.
Who can get one?
A business who can demonstrate good financial circumstances.
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