PAYDAY LOANS : A Comprehensive study





Business Payday Loan


A business payday loan or business cash advance is a short-term financing used to meet the immediate financial need of the company. A small business can usually apply and get pre-approval in at least an hours or two by providing personal and business financial documents. A  small business loan can be financed quickly and deposited into your company’s account within a few days.




Cash Advance


A business cash advance is a conventional loan, but in fact no loan is made. Instead, when a company receives a daily cash advance, instead of selling some of their future earnings, the proceeds go to the advance company’s proceed to instantly deposit money into the sales company’s bank account. Payment loans can be used to sell a company’s future bank account deposits or a percentage of the sales volume of a company’s credit card transactions.







Cash Advanced Deference from a Payday Loan


A payday loan is a way to get instant money from a person and is also a real loan. When we say “real debt”, we mean that money is actually the lender to the lender and the loan terms are pre-established. A loan usually uses an APR and an interest rate specified. These transactions are regulated by conventional credit, as cash advances are no credit at all, and are actually a business- to- business transactions.


Payday Loan Uses


Payday loans for use are largely working capital. If a business finds its money low, and has to pay for bridge liabilities, a payday loan is a good option- unless you have access to a line of credit or even business credit cards. Businesses are also used day- to- day loans to help you pay with the payment requirement. The thought of delaying pay can be scary. Knowing that you have access to a fast- paced business pay advance can give you peace of mind knowing that a business owner has the funds. There are times when a company can find a piece of equipment right away.



Requirements for Business Payday Loans


The requirements for day- to- day cash advances depend on the dozens of MCA payment lenders you got to. Every paid business lender has different needs and different funding programs. Some offer everyday credit for credit card transactions. Some payment funders require a certain amount of bank deposits in small businesses. There is another fundraiser to split the funds between- basically a combination of both credit card transactions and automated clearinghouse (ACH) payments.






Types of Payday Loans


Types Rates Terms Funding
Short Term 1.10-1.50 4-6 months 1-2 days
Long Term 1.10-1.50 12-21 months 3-5 days



Short term payday loans

Used for short- term working capital purposes and for high-risk companies with bad credit, multi-cash advances or funded companies. Short term cash advance lenders typically have between 4-6 months for first or multiple positions. High ratios come with short terms and factor ratios range anywhere from 1.1 to 1.5 most of these funders provides high end factor ratios.





Long term payday loans


Loan term payday loans is the first place cash advance in the range of 12-21 months or 2nd place cash advance in the range of 9- 18 months. Another advantage of these long term payday loan companies is that they can offer periodic payments on a regular basis, thus helping the company’s cash flow to pay down its debts.




Advantages and Disadvantages of Payday Loans


Payday loans can be useful tool to borrow a small amount of money for a short period of time. When used correctly and with good intentions, you can have a positive experience with a loan you paid for and get the results you want. While everyday debt may seem appealing, the truth is that for many years now, everyday debt has caused many controversies. Paid debts are, of course, notorious for destroying people’s money and launching into fearful debt. As many borrowers misuse and misinterpret everyday debt, it is important to be a prospective client that you know both the advantages and disadvantages of these types of loans.



Advantages of Payday Loan


  • Provide an alternative when there are no others- if you find yourself in financial trouble and you have no other solution than a loan that will cover you until your next paycheck, this is a go option for you to consider.
  • It is easy to get– these loans do not require a credit check or access to a credit card. Citizens of eighteen years of age or older are eligible for a payday loan with a monthly salary, driver’s license and access to a check or savings account


  • Fast and easy- this credit facility allows you to apply online and cancel all the paperwork that comes with traditional loans. After submitting your application through a payment lender’s website, you will be approved shortly after, and within a few hours or days funds will be in your account.


Disadvantages of Payday Loan


  • More expensive than other loans- Interest on day-to-day loans can range from 300 to 900 percent. Keep in mind that this is a short term loan and compare it to the average 12% APR of a credit card. Then you will realize just how expensive these loans really are.
  • It is easy to fall into a vicious circle-much of the profits earned by payday loan companies come from customers who cann6t repay the loan before the due date. The result is that consumer pays a higher fee than the borrowed original amount.


  • Deception by lenders– companies that specialize in lending money in the form of day- to- day loans may find the information they reveal may be deceptive