Cash Advance: The Pros and The Cons | Merchant One

Do you need cash now and fast? You might consider getting a cash advance if:


  • You need to pay the rent on your retail space. 
  • You have a utility bill due tomorrow. 
  • You have a vendor payment to complete today but are waiting on a payment to come through to cover the expenses. 


Cash advances are a simple way to get money quickly to cover payments you either can’t or don’t want to use a credit card for. Just as you buy inventory for your business on credit, sometimes you may need to buy cash you can use right away. That’s basically what a cash advance is.

This method can be a lifesaver if you’re in a tough situation, but keep in mind that it can be expensive. Take a look at the pros and cons of getting a cash advance to decide if this quick money solution is right for you.

Pros of Cash Advances

Fast Payments

A cash advance is not a bank loan. When your business is first starting out, cash will be hard to come by, and anything you earn will likely be invested back into the business or used to cover personal expenses. Some small businesses may apply for a bank loan to help them get by, but it can take time to apply and wait for approval. If you need cash now, a cash advance is a good strategy.

 Easy Approval 

Getting approval for cash advances can be much easier and simpler than it is for small business or personal loans. It’s true that some cash advance companies may ask for your sales records as evidence that you can make the money back and may ask your plans for the money. Other than that, though, approvals can be simple, which is just what a new business owner might need.

Cons of Cash Advances

 High Bank Fees

The biggest drawback to getting a cash advance is that they can be costly. Banks tack on heavy fees when you withdraw cash using your line of credit. Some may charge a flat rate per withdrawal, while others charge a percentage of the cash advance.

High Interest Rates

Interest rates are much higher on cash advances than on purchases, and they generally start accruing immediately, without a grace period. Interest on cash advances can range from 15% to 30%. If you can’t pay your cash advance back fast, the interest will accumulate, leading to an expensive debt. 

Money doesn’t grow on trees, and getting it quick is rarely cheap. But if you are in a bind and need some extra cash now, a cash advance can help. For example, if you have an invoice due that you can’t quite cover but know you have money coming in soon, a cash advance can be a good option—if you can afford the fees and some interest. Before taking one out, just make sure you can pay it back in full, preferably within six weeks of obtaining the cash, to avoid owing too much in interest.

Are you looking for a quick money solution for your business? Merchant One offers fair prices on cash advance services for little to zero line of credit. Find out more today about Merchant One's cash advances!

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