Business Cash Advances and Working Capital Financing Applications

Online applications for commercial loans and business cash advances are being used increasingly by commercial lenders. As discussed below, the convenient but questionable practice is not in the best interest of commercial borrowers.

Business owners should anticipate that many commercial lenders will provide an online application for working capital advance and small business loan programs on their website. It is important that business borrowers understand how to proceed in their search for viable financing and why it is not in their best interest to submit an online application for commercial loans and business cash advances.

This commercial funding article will describe how and why to avoid the online application trap involving business financing.

Commercial borrowers should avoid submittals of any application forms for business loans until after specific lender interactions. Business owners should especially avoid online applications for business cash advances and commercial loans. Most working capital financing websites will include some version of an online application. Here is a four-step process for avoiding the unwise use of applications.

The first step: avoid the initial temptation to submit a commercial loans financing application online.

It does appear to be convenient for a commercial borrower to apply for financing online. Perhaps some business owners are attracted to the anonymous nature of the online application because they have been annoyed by evasive answers and questionable sales tactics in loan discussions.

Many lenders provide online business finance applications in large part because they are fearful of losing some competitive advantage by not having this capability. However in attempting to match their competition, lenders are sacrificing the best interests of their commercial borrower clients by facilitating an unwise online application process for working capital loans.

The second step: understand why it is essential to avoid an online working capital finance application.

Submitting a commercial loan application via a website is equivalent to blindly sending a resume to a company seeking employment without any prior discussions or research. What makes an online finance application even more inadvisable and riskier than the anonymous resume example is the usual inclusion of tax identification numbers and other sensitive business data on a commercial funding application.

There are several key problems associated with an online business financing application. First, there are potential security breaches during transmission as well as before and after transmission. Second, there is a significant loss of control by the commercial borrower in the use of their social security number or business tax identification number for checking credit because many online business finance processes will result in checking credit before any personal conversations occur. Third, most commercial loans are simply too complex to initiate by an oversimplified automated process. Starting the commercial mortgage loan or business cash advance process with an automated application is similar to the kickoff of a football game occurring without any pre-game warmups, coaching pep talks or the traditional coin toss. The convenient approach simply omits too many essential steps.

The third step: replace an online commercial loan application process with a better approach.

The most practical solution to the commercial finance application dilemma is to insist on preliminary personal discussions with an experienced advisor before submitting any form of business finance application. A suitable and ethical commercial lender will not ask a commercial borrower to submit any application until the borrower has completed a thorough discussion with the lender confirming that business financing is appropriate for a specific situation.

It should be anticipated that some commercial lenders will attempt to minimize the potential problems associated with an online application. Instead of dealing with such a business financing advisor, commercial borrowers should seek out one of the relatively few commercial loan advisor's willing to emphasize a conversational and individualized approach to commercial funding for a business owner.

The fourth step: explore additional resources that will facilitate a better understanding of complex business finance issues.

The Working Capital Loans Guide and The Commercial Mortgage Loans Guide are two examples of business financing resources that will provide strategies for many problematic circumstances dealing with small business cash management. Keep in mind that the process to secure commercial loans is usually more complex than most borrowers realize.

Commercial Loans
Information about working capital funding.