Figure Cash Advance: Is It Right for Your Business?

Figure Cash Advance is a financing option that can provide your business with quick access to cash. It's essentially a loan that's repaid through future credit card sales.

The amount you can borrow with a Figure Cash Advance varies, but it's typically based on a percentage of your business's average monthly credit card sales. This percentage can range from 5% to 150% of your monthly sales.

A key benefit of a Figure Cash Advance is that it allows you to borrow a larger amount of money than other financing options, such as a traditional bank loan. This can be especially helpful if you need to cover a large expense or make a significant investment in your business.

The repayment terms for a Figure Cash Advance are typically tied to your business's future credit card sales, which means you only pay back the loan when you process a credit card transaction. This can help reduce the risk of default and make it easier to manage your cash flow.

A figure cash advance is essentially a short-term loan offered by your credit card issuer. You can get a cash advance in a few different ways.

At an ATM, you can use your credit card to withdraw cash if you have a PIN. If you don't have a PIN, you can request one from your card issuer, but it may take a few business days to receive it.

You can also get a cash advance in person at your bank. Just visit your bank and request a cash advance with your credit card.

Another option is to use convenience checks that may have come with your credit card. These checks can be used to write a check to yourself, which you can then cash or deposit.

Here are the ways to get a cash advance:

Cash advances can be a costly affair, with fees that add up quickly. The average APR for a cash advance hovers between 17.99% and 29.99%, according to Forbes.

You'll also face a cash advance fee, typically 3% to 8% of the total amount borrowed. For example, a $1,000 cash advance with a 3% flat fee will cost you an additional $30.

A cash advance can incur interest starting from the date you withdraw the cash, with no grace period like there is for purchases. This means you'll be charged interest immediately, adding to the overall cost.

Here's a breakdown of the costs associated with a $500 cash advance:

In this example, the total interest and fees for a $500 cash advance would be $99.50, if you paid $50 a month over 12 months.

Cash advances can be expensive, with interest rates ranging from 17.99% to 29.99% APR, according to Forbes. This means you'll pay a significant amount in interest, on top of any fees.

The average cash advance APR is between 17.99% and 29.99%, making it a costly way to borrow money. Some credit cards have an even higher APR for cash advances, such as the Citi Double Cash Card, which has a 29.74% variable APR for cash advances.

A $1,000 cash advance with a 24% APR and a 3% flat fee can cost you $1,034.60, if you take a week to pay it back. This is a total of $34.60 in interest and fees, on top of the original $1,000 borrowed.

The cost of a cash advance can add up quickly, with a $500 cash advance costing $99.50 in interest and fees, if you only pay $50 a month.

Here's a breakdown of the costs associated with a $500 cash advance:

Keep in mind that these costs can vary depending on your credit card and the terms of your cash advance. It's essential to review your credit card contract and understand the fees and interest rates associated with cash advances.

Taking out a cash advance can raise your outstanding balance, which in turn raises your credit utilization ratio, a measure credit scoring models take into account in calculating your score.

If you owe $500 on a card with a $1,500 limit, your credit utilization ratio is 30%. However, if you take out a $300 cash advance on that card, the balance will jump to $800, resulting in a credit utilization of more than 53%.

The scoring models and lenders generally favor a credit utilization ratio of 30% or less.

However, if you have a higher credit limit on your card or multiple cards with their own limits, that $300 would have less of an effect on your overall ratio.

If you're considering a Figure Cash Advance, you might want to think twice. Taking out a cash advance can quickly lead to debt, so it's better to explore alternative options.

You can ask family or friends for a loan, which can be the most cost-effective way to get the cash you need. Just make sure you create a repayment plan to keep your relationship on good terms.

Personal loans are another viable option, offering better terms than a cash advance and access to more cash if you have good credit. With a personal loan, you can pay back the loan at a fixed interest rate that's much lower than the APR charged by credit card issuers.

Here are some alternative options to consider:

A merchant cash advance is a type of funding that's issued to businesses in need of quick cash, often repaid out of daily credit and debit card receipts.

It's essentially an advance against future sales, rather than a loan per se, which can be a more flexible option for businesses with fluctuating income. Merchant cash advances can be easier and faster to obtain than traditional business loans.

Repayment methods vary, but some MCA companies automatically deduct funds from credit card sales, while others use a lockbox or trust account withholding. This means you may not have to worry about making manual payments.

One of the pros of a merchant cash advance is that it allows you to get cash quickly, with an easy application process. This can be especially helpful for businesses with decent daily credit and debit card sales.

The difference between a purchase and a sale is quite straightforward. A purchase is a standard transaction where you pay for goods or services with your credit card, but a sale is often associated with a merchant cash advance.

With a credit card, you typically get a grace period between the purchase date and the payment due date. This means you don't have to pay interest right away. However, with a merchant cash advance, you're essentially borrowing money from the lender, which starts accruing interest immediately.

Merchant cash advances often have higher interest rates than standard credit card purchases. For example, one widely held card recently charged from 21.49% to 28.49% on purchases, but 29.99% on cash advances.

Merchant cash advances are issued to businesses in need of quick cash to fund their activities, often repaid out of daily credit and debit card receipts.

They can be easier and faster to obtain than traditional business loans, and don't require a personal guarantee in some cases. However, some MCA companies do require a personal guarantee.

You can get a merchant cash advance if your business brings in a decent volume of daily credit and debit card sales, which is how the money is paid back. This means if your personal credit is poor, it won't deter some merchant cash advance companies from approving you.

Merchant cash advances typically don't have recourse to go after you personally if your business is unable to make payments, but some companies require a personal guarantee. Always make sure you read the fine print.

A small business owner has to be mindful of the fees and structure of a merchant cash advance, and do some due diligence before agreeing to the terms. It's critical to perform calculations to figure out if the cost is really worth it.

Merchant cash advances can carry APRs in the triple digits, making them one of the most expensive ways to get cash for your business. This is a major problem, especially when compared to credit card interest rates or microloans.

Because there's no federal oversight of MCAs, they can sometimes fall under the definition of predatory lending, which means the loan terms are unfair to the borrower. This can be confusing, since MCAs aren't technically loans.

If you're looking for alternative options to borrow money until your next paycheck, you have a few choices. Cash advance apps like Varo, Payactiv, MoneyLion, Dave, EarnIn, and Empower are another option today.

These apps typically offer advances of $1,000 or less and must be repaid within a short time frame, such as 30 days or when you receive your next paycheck. They often charge high interest rates, over 100% in some cases when expressed as an annual percentage rate (APR), plus other fees.

Some cash advance apps require a monthly subscription fee, like Varo, which charges a $9.99 monthly subscription. Others, like Payactiv, offer more affordable options.

Here are a few cash advance apps to consider:

Cash advance apps are a convenient option for borrowing money until payday. They typically offer advances of $1,000 or less and must be repaid within a short time frame, such as 30 days or when you receive your next paycheck.

Some popular cash advance apps include Varo, Payactiv, MoneyLion, Dave, EarnIn, and Empower. These apps tend to charge far less than payday loans, but still have high interest rates, often over 100% APR.

If you're looking for a cash advance app that's compatible with Chime, you have several options. You can also consider other apps like Albert, FloatMe, Gerald, Rain, and SoLo.

To use a cash advance app, you'll typically need to download the app from the Google Play or Apple Store and connect your checking account. Most apps require the account to have recurring direct deposits.

Here are some popular cash advance apps to consider:

Credit card cash advances can provide quick access to funds, but they come with high interest rates and fees that can add up quickly. These advances often carry an interest rate higher than regular purchases, and the interest starts accruing immediately.

You might be charged a fee, either a flat rate or a percentage of the advanced amount, and using an ATM to access the cash can also incur a small usage fee. Credit card companies treat cash advances as separate from purchases, with their own separate balances on your account statement.

Your monthly payments can be applied to both balances, but if you only pay the minimum amount due, the card issuer is allowed to apply it to the balance with the lower interest rate, usually the rate for purchases. This can leave the cash advance balance to accrue interest for months.

Paying more than the minimum will help reduce your debt faster, so it's essential to make extra payments if possible. Credit card cash advances do not qualify for no- or low-interest-rate introductory offers, so be aware of the potential costs.

Business credit cards can also provide quick access to funds, but they come with higher rates and the potential for a vicious cycle of debt if you're unable to make payments. Approval is based in large part on personal credit history.