April 2nd, 2008 | 
Author: 
Erik S Heyl asked:
To terms that get kicked around quite a bit in the finance world are business cash advance and business lines of credit. But how did these two forms of financing differ from each other and what are the advantages and disadvantages to each one? First will cover the business credit line, a credit line for your business is an amount of money that is disbursed based on the underlying availability of credit. So for example if your business has a $5000 credit line you have $5000 available to you for anything you want to spend it on and also unlike a loan you can borrow this money again and again assuming that you have paid off the balance.
A business cash advance differs from loans and credit lines in that repayment is typically scheduled around sales either directly or indirectly. One way in which they are tied to sales is through your merchant account with your credit card processing company. So for example if you were to borrow $1000 in the form of a cash advance and have $800 disbursed, the difference of $200 is referred to as the discount rate which functions in a similar fashion to interest but is not paid back in a monthly fashion, then in order to have the cash advance repaid you would perhaps give a small amount of money for every credit card transaction. Cash advances have one thing in common with business lines of credit in that typically once the advance has been repaid it is easy to receive additional funds for the same amount to be repaid under the same terms as the original disbursement.
Business Credit Card
To terms that get kicked around quite a bit in the finance world are business cash advance and business lines of credit. But how did these two forms of financing differ from each other and what are the advantages and disadvantages to each one? First will cover the business credit line, a credit line for your business is an amount of money that is disbursed based on the underlying availability of credit. So for example if your business has a $5000 credit line you have $5000 available to you for anything you want to spend it on and also unlike a loan you can borrow this money again and again assuming that you have paid off the balance.
A business cash advance differs from loans and credit lines in that repayment is typically scheduled around sales either directly or indirectly. One way in which they are tied to sales is through your merchant account with your credit card processing company. So for example if you were to borrow $1000 in the form of a cash advance and have $800 disbursed, the difference of $200 is referred to as the discount rate which functions in a similar fashion to interest but is not paid back in a monthly fashion, then in order to have the cash advance repaid you would perhaps give a small amount of money for every credit card transaction. Cash advances have one thing in common with business lines of credit in that typically once the advance has been repaid it is easy to receive additional funds for the same amount to be repaid under the same terms as the original disbursement.
Business Credit Card
About Wade Henderson
Wade Henderson: Domestic and International Business Finance since 1995 specializing in challenge situations. "We prefer to find a way to get your loan done as opposed to finding a reason to turn it down.” Connect with me on Google+
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