Pros and Cons of payday loans for small business

Simply put, the cash loan a small business can take is given out against the income the enterprise will receive the next moth after getting the advance. Today, getting such an loan is quite easy, taking into regard the growing number of financial agencies that are setting up their websites where you can get such service in a couple of minutes, literally. This is why you have to know the pros and cons of such lending services if you're running a small business - the competition gets tougher and the market is growing.

It is quite easy to apply for a small business loan via fax or email. In this way the application processes very fast, as you don't have to visit the bank or office by yourself. But the main point here is to apply for such an advice only if you're sure you really need it and can actually repay it on the due date. If you check you financial abilities when taking out a loan it is better to find other sources of financing that would be less comfortable on the application level, but would provide lower interest rates.

Below you can find some pros of cash loans for small business:

Within only a single day you can get up to $1,500 on your banking account or in cash.

Even having a bad credit rating or a complicated financial situation doesn't restrict you from getting a loan.

The only information needed during application is your personal data and employment. No business documentation is required.

This type of loans can be used in any situation and it's only up to you to decide where to use these funds. No one will ask you for the purpose of this advance.

The paperwork that is required during the application process is very simple and only involves your personal details, information about your employment and your banking account.

You receive the money on your banking account in just 24 hours after application.

But there are always some cons:

What a small business will surely be irritated of is that payday loans are available only in small cash amount and you won't be able to take out more than $500 to $1,500 per application.

Failure to reimburse the loan within the set period of time will reflect negatively on your credit score.

The interest rates are amongst the highest in all loan services. It is recommended that you analyze your financial situation or consult with a loan expert before applying for a cash advance.

Usually you get only two weeks to repay the loan amount together with the high interest rate.

Extending the deadline for your cash advance is not such a good idea because you will end up paying much more than you have initially planned.

Payday loans are not a good choice if you need a considerable amount of money over a longer period of time.

You can sometimes face double or triple charges if you allow the lender to deduct the rates and paybacks directly from your salary account.

Sometimes the interest rates are so high that you can face a situation when your whole next paycheck will be spent on servicing the cash advance.