Five Mistakes to Avoid When Considering Cash Advances for Business Financing

1. Five Mistakes to Avoid When Considering Cash Advances for Business Financing

2. Cash advances can be a very useful business financing tool for smart entrepreneurs. Companies like Mantis Funding offer a quick and simple approval process. If you just avoid some common mistakes that entrepreneurs make, cash advances could be the solution for your cash flow or working capital funding issues.

3. Blindly Believing Misconceptions

4. Surprisingly, the most common mistake is that business owners don’t consider cash advances at all due to misconceptions. Cash advances are not technically like the bank funding, they are business financing tools where you repay with a percentage of future receivables. Instead of credit score, companies like Mantis Funding consider business sales, business model and customer base as criteria for approval. Cash advances often have high approval rates and the advanced funds are quickly transferred to your business bank account within a few days, not weeks.

5. Not Using for Business Opportunity

6. Business owners sometimes do not realize that they can use cash advances to tide over a liquidity crunch or take advantage of a business opportunity. For example, if equipment needs repair or you need to buy new inventory, approaching a bank is not the ideal solution. Also, if you need to pay down payment for a new storefront that just opened up for occupancy or has an opportunity to purchase a large supply of inventory at deeply discounted prices, you may want to consider alternative financing sources.

7. Not Having Means to Repay

8. Cash advances are a great financing tool for businesses that are profitable and see a steady stream of sales and revenues. However, if your business is not turning over a profit, you should consider alternative financing solutions. If you’re not able to fulfill the terms of the cash advance contract, it could result in legal action or seizing of assets. Mantis Funding reviews each application on merit and if you cannot provide proof of consistent sales in the past and present, you may not even be eligible for a cash advance.

9. Not Having a Business Plan

10. Another mistake that entrepreneurs make is that they don’t have a business plan in mind. Cash advances do come with some degree of flexibility. For example, the amount you pay in installments is pegged to your incoming revenue. Only the percentage is fixed and you can pay less or more depending on sales. No matter how confident you are of future sales, it’s necessary to have a plan B in case something goes wrong. You’ll still have to repay a cash advance or else face the consequences.

11. Not Doing Enough Research

12. In their desperation, some business owners often make the mistake of accepting a funding proposal from the first business financing company they come across. The cash advance industry is not federally regulated and there are many unreliable companies looking to cheat vulnerable businesses. If you look at Mantis Funding reviews online, you’ll find that this company is trusted by customers and the customer feedback is largely positive. Any complaints are sought to be resolved by keeping the customer in the loop. Don’t be intimidated by the above-mentioned mistakes. Use your intelligence and business acumen to make the best use of cash advances!