How Does Revenued Compare to Other Cash Advance Programs?

When they need a source of capital to support operations, most small business owners turn to bank loans and credit cards. According to a 2020 Federal Reserve small business survey, 88% of financing applicants sought a loan or line of credit, while 29% applied for a business credit card.

Newer companies or those with poor credit may find it challenging to qualify for traditional financing products. Thankfully, alternative lenders offer options, including cash advance programs, that are less restrictive and can put steady cash flow within reach of virtually any small business.

Keep reading to find out how Revenued compares to other cash advance programs.

Cash Advance Basics

If an early-2000s business owner needed money to obtain working capital or expand their operations, the choices were limited. They needed to fund their firm using personal resources or by getting a bank loan. After the 2007-08 financial crisis, banks were less eager to help business owners with low credit scores.

Seeing there was an obvious need for business funding options, alternative options including cash advances were created by lenders. These options allowed entrepreneurs to develop their companies without experiencing the lengthy application process, only to be issued a denial at the end of it.

Lenders created the cash advance and other alternative funding options to prioritize a company’s profitability and vision, rather than the owner’s credit profile. With a cash advance, your firm can receive funds against its projected future revenue. Typical cash advance features include:

  • No collateral requirements, since future revenue serves as security
  • Fast approval and funding when compared to traditional bank loans
  • Accessibility to business owners with low credit scores
  • Repayments via daily or weekly withdrawals from your bank account
  • Payback amounts that are either a percentage of actual sales or based on average sales figures

With easier and faster funding, cash advance programs are geared toward small business owners turned down by traditional lenders.

Types of Cash Advance Programs

A merchant cash advance (MCA) is one example of a cash advance program. With an MCA, your business acquires a lump sum of money in exchange for a percentage of future credit card sales.

Once funding is established, the MCA issuer withdraws funds from your bank account as a payback. These payments fluctuate based on your revenue and continue daily until the advance and fees are paid back in their entirety.

Yet, the MCA is not the only cash advance program available to small businesses. Other cash advance options include:

  • Automated Clearing House (ACH) advance—An ACH advance is similar to an MCA; however, repayment is not based on credit card sales. Instead, your payments are fixed and based on sales history. Repayment funds are withdrawn each day or week automatically according to this set schedule.
  • Invoice factoring—With invoice factoring, business owners sell their company’s unpaid customer invoices to a factoring company at a discount. You receive a portion of what is owed to you, and the factoring company collects the invoice balance as repayment.
  • Accounts receivable financing—Company owners can also leverage unpaid customer invoices for cash through accounts receivable financing. The lender advances funds based on what’s owed to you by your customers, then you collect on the invoices and use the proceeds to repay your advance.

Disadvantages of Other Cash Advance Programs

As mentioned above, cash advance programs provide potential benefits to small businesses unable to qualify for traditional bank loans. However, the potential disadvantages associated with these other cash advance programs include:

  • High costs and hidden fees—Unfortunately, there are unscrupulous lenders out there who will purposely mislead hard-working business owners like you about their fees. After the contracts are signed, these lenders spring extra costs, ballooning cash advance prices well beyond what most small businesses can afford.
  • Charges for unused funds—If you aren’t sure exactly how much financing your company will use, you may end up spending more than you need to. Why? Because some cash advance programs require you to pay a fee for the full funding amount you receive, even if left unused in your bank account.
  • Limited usefulness to some businesses—Many cash advance programs were created explicitly for invoice-based firms or those with a high volume of credit card sales. Companies that fall outside this mold may have to look elsewhere for funding.

Revenued’s Advantage Over Other Cash Advance Programs

The Revenued Business Card incorporates cash advance program benefits without the drawbacks. Here are a few of the dynamic features that set the Revenued Card apart from other cash advance programs:

  • You only pay for what you need—Rather than a lump sum like you receive with a cash advance, you can use as little or as much of your spending limit as you need. If you don’t spend it, you don’t pay for it.
  • A convenient physical card—Carry the Revenued Card in your wallet or purse to pay merchants who accept credit and debit cards. The card works for both online and in-person payments.
  • Cash draw option—If you need to pay someone who doesn’t accept credit cards, you can request a cash draw through your online merchant portal.
  • No collateral needed—With the Revenued Card, your business never needs to put its hard-earned assets at risk.
  • No hard inquiries on your credit report—We run a soft credit pull to check your payment history and to ensure there are no previous MCA defaults. Your credit score is not affected.
  • No minimum credit score requirement—Business owners with subprime credit can qualify.
  • No prepayment penalties—Payback can occur according to the established calendar and terms, or you can prepay without extra fees or penalties.
  • Straightforward and easy to calculate costs—There are no hidden fees or add-ons. You will have all the information you need to calculate and plan for the exact cost of the money you spend.
  • Flexible financing for virtually any business—U.S.-based businesses in nearly any industry can use the Revenued Card, regardless of whether they have invoices or credit card sales to use as leverage.

Discover why Revenued Business Card is the unrivaled choice to fortify your firm’s bottom line and elevate profitability. Apply now and if you have any questions contact our experts today at call +1 (877) 662-3489 or email [email protected] and a member of our 5-star team will be happy to help.

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