{"id":26228,"date":"2018-01-29T19:37:37","date_gmt":"2018-01-29T19:37:37","guid":{"rendered":"https:\/\/www.arffinancial.com\/development\/?page_id=26228"},"modified":"2024-02-01T14:41:18","modified_gmt":"2024-02-01T19:41:18","slug":"loan-vs-cash-advance","status":"publish","type":"page","link":"https:\/\/www.arffinancial.com\/development\/working-with-us\/how-it-works\/loan-vs-cash-advance\/","title":{"rendered":"Loan Vs Cash Advance"},"content":{"rendered":"

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Make the Best Choice for Your Bottom Line
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A merchant cash advance (MCA) is an alternative form of financing where the cash provider purchases a fixed amount of a merchant\u2019s future credit card sales, typically at a significant discount (up to 50%). The MCA is paid back from a percentage of the merchant\u2019s daily credit card receipts, which means that the business\u2019 payments go up as its sales and profits do. In other words, the more successful a business owner is, the faster the cash advance provider gets paid back, escalating the business\u2019 effective interest rate to astronomical heights. As shown in the diagrams below, a business loan from ARF Financial, with longer, fixed terms, allows a business owner to keep the additional profit generated from their hard work!<\/p>\n

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BUSINESS LOAN\u00a0 vs.\u00a0 A MERCHANT CASH ADVANCE<\/div>\n

[\/vc_column_text][vc_column_text]A merchant cash advance is very different than a business loan. It is a form of factoring where a financial services company agrees to buy an amount of your future credit card sales at a discount, typically from 30% to 38%, and then electronically debits a percentage of your daily credit card receipts until the agreed upon amount has been paid back.[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner content_placement=”top” css=”.vc_custom_1652030591697{margin-top: 0px !important;}”][vc_column_inner width=”1\/2″][vc_column_text]<\/p>\n

Why a Business Loan Works<\/h3>\n

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Why a Cash Advance Doesn’t Work<\/h3>\n

[\/vc_column_text][vc_single_image image=”28443″ img_size=”full” alignment=”center”][\/vc_column_inner][\/vc_row_inner][vc_row_inner content_placement=”top” css=”.vc_custom_1652030607859{margin-top: 0px !important;}”][vc_column_inner][vc_column_text]The problem? As shown in the graph, the more money you make (higher sales), the faster the cash advance provider gets paid back, thus raising the cost of funds to your business significantly. The shorter the term, the more expensive the advance becomes.<\/span><\/p>\n

Restaurant owners, like many small businesses, are frequently being offered cash advances by a myriad of companies and\/or brokers. Unfortunately, with many cash advance providers, your payment can change each week, or even daily, based upon your credit card sales. While merchant cash advances may appear to be a quick and easy option for busy restaurant and small business owners, the reality is a business loan is actually just as quick and way less expensive in the long run. ARF Financial offers larger loan amounts, longer terms and fixed, weekly payments that never change \u2013 great for budgeting and cash flow. All too often, the actual cost and inner workings of a merchant cash advance depends on the company offering it. With ARF Financial, there is no need to change your existing credit card processor, no complicated reconciliations to perform, and the repayment terms are made clear up front.<\/p>\n

If your restaurant business is growing, don\u2019t pay back your cash advance with a percentage of your Visa and Mastercard sales! As a successful restaurateur, why undermine your business\u2019 operating health by giving away your new increased sales? Also, unlike a merchant cash advance, the interest on our business loans is tax deductible. This effectively lowers the total cost of your cost of funds even more in the long run.<\/p>\n

A business loan with ARF Financial is the preferred choice compared to a merchant cash advance. Rates are lower, payments are fixed, terms are longer and the interest you pay is tax deductible. Most importantly, as your sales increase, your payments remain fixed. That means you, the restaurant owner, reap the benefits of increased sales, not the cash advance company. No matter what the future holds, ARF Financial is your best choice for a business loan, restaurant loan, or restaurant financing to capitalize on new opportunities \u2013 often when conventional banks simply won\u2019t consider it.[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row full_width=”stretch_row” css=”.vc_custom_1647345465951{margin-top: 0px !important;margin-bottom: 0px !important;padding-bottom: 10px !important;background: #00659e url(https:\/\/www.arffinancial.com\/development\/wp-content\/uploads\/2022\/02\/cash-background-dk-blue.jpg?id=40634) !important;background-position: center !important;background-repeat: no-repeat !important;background-size: cover !important;}”][vc_column][vc_column_text css=”.vc_custom_1652033041508{margin-bottom: 0px !important;}”]<\/p>\n

When choosing the right business lender, it\u2019s important to compare loan size and repayment terms because…<\/span><\/div>\n

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Size Matters!<\/div>\n

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Larger Loan Amounts, Longer Terms and Big Rewards!
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Expansion projects, renovations, and additional locations are all big decisions that can bring big returns. However, big projects usually mean big upfront investments, something you can’t get from a merchant cash advance. If you’re ready to go BIG this year, we have financing that’s the perfect fit. You can now borrow up to $1,000,000 with terms up to 36 months to fund those big projects while keeping your costs low. Our average loan size is over six times larger<\/span><\/strong> and repayment terms are more than three times longer<\/strong><\/span> than a Merchant Cash Advance. Larger loan amounts mean you can invest in growth opportunities that will make a significant impact to your bottom line, and longer terms mean your payments are manageable and won\u2019t interfere with your cash flow! Check out the comparison below.<\/p>\n

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