Small Business Loan Comparison

Loan Comparison - Fixed-Term Loans to Fixed-Interest Loans

We make two types of small business loans available: (a) fixed-term loans, and (b) fixed-interest loans. The programs and loan comparison discussed here relate to loans and loan alternatives that are based on a company's future cash flow.

With a fixed-term loan, the daily payments and their due-dates when the loan begins. Making a loan comparison, with a fixed-interest rate loan, as are available for merchants today, daily payments and their due-dates are not set in advance, but the interest rate rate used to calculate the amount of interest dollars due during payback is fixed.

Making a broader loan comparison, traditional bank loans (which can be viewed as a fixed-interest rate programs) are fairly well understood by business owners, we find in our interaction with customers. Think of a fixed-term loan (and the slightly more expensive business cash advance) as similar an automobile lease.

Loan Comparison: Cash Flow Loans and Merchant Advances

  Fixed-Term Loan Fixed-Interest Loan Business Cash Advance
Personal guarantee Yes Yes No
Daily Payment Amounts Fixed Variable Variable
Effective Interest Rate Varies Fixed Varies
6 month payback per $10,000 (1) $12,000 $11,200 $13,800
Typical FICO range (2) 600+ 650+ 530+
Credit Card Processor Change Not required Usually required Frequently required
Sucessful payment - Impact on credit Reflected positively Reflected positively Not reflected
Amount paid back Specified up front Not known in advance Specified up front
Tax deductible interest Yes (3) Yes (3) No
Payback Frequency Business days only Each day a CC batch is sent Each day a CC batch is sent
Credit Agency Reporting Yes Yes No (4)

(1) When comparing popular programs. Rates subject to change at any time. Exceptions apply, based on underwriting criteria, actual payback time, etc. (2) Business credit ratings, credit history and many other factors apply (3) Consult your tax advisor (4) except if payback is in default


Learn More About Loan Comparison - Small Business Loans

  1. Documentation required for a Fixed-Term Business Loan
  2. Documentation required for Fixed-Interest Business Loan
  3. The next steps for obtaining a Fixed-Term Business Loan


 

 

 

 

 

 

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Client Testimonials

We pride ourselves on providing excellent customer service, honest answers and competitive pricing.

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Whether we provide you with a small business loan, a merchant advance, receivables factoring or if we reduce your monthly costs to process transactions, we aim to increase your company's growth and profits.

Our customers agree.

"I will def call u guys again if I need a loan, thank you for your help" Ilir M., Pizza Restaurant in Texas Oct 2009

"Hey Chris. You guys have been great. Thanks again, you have been super." Wedding Shop in Arizona Dec 2009

"Thanks a million. It seems to be going pretty well, we may be interested at some point of rolling it over and doing it again." Tom T., Medical Billing Company, Southern California, Dec 2009

"Chris, I have to commend you on your promptness. After going through a whole month with the other guys,and still being declined. I am really impressed how quickly you moved things along. I will tell all of my fellow business aquaintences about you and your wonderful service. Again, I thank you for assisting me in such a timely fashion." Sherri O., Salon in Florida Sept 2009

"Thank you for helping me grow my inventory and take share during this tough market." Darryl B. Apparel Retailer, Northern California, July 2009

"Chris, Everything going great. Very happy with my experience with you. Thanks." Larry C., Retailer in AZ Nov 2009



Chris, we were very impressed with how fast you got us the money. You guys are first on our list! John M., Illinois

*Cash Federal directly funds advances or makes referrals. Merchant Cash Advances are not loans. Cash Federal refers loans to regulated lenders -
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Small Business Loan Comparison #1: With a fixed-interest loan, if you pay back at a slower rate, you will owe more interest. In this respect it is similar to a credit card, where carrying a balance will hurt you.

Small business Loan Comparison #2: However, the fixed-interest programs that are available to small business owners currently have lower effective interest rates than the fixed-term loans. If you plan to pay off this loan before it is due, this kind of loan will benefit you.

Small Business Loan Comparison #3: One potential drawback of popular fixed-interest loan programs available for merchant, though, is that the expected interest payments the business will pay in the future are not known in advance. This is because daily payments are tied to an unknown in the future, which are sales. So, if sales are slower, then the payback term will be greater, incurring a larger interest payment over the course of the loan. Our experience, though, is that these fixed-interest loans typically have the lowest rates when compared to fixed-term loans and business cash advances.

Small business Loan Comparison #4: If you'd like to compare a fixed-term loan to a business business cash advance or a low-credit business cash advance, you can visit those pages and view the business cash advance calculators.

Small Business Loan Comparison #5: Did you know that interest your business pays each year may be tax deductible? Probably not so for a cash advance. Speak with your tax professional for details.

Small Business Loan Comparison #6: Effective interest rates varies for a small business loan with a fixed-term.