Consumer Guide to Cash Advance Companies

Now, with the advent of convenient online cash advance companies, you don’t have to worry about loan sharks or running out of gas on the highway. However, you do have to know how to figure out who’s legitimate and who’s just going to leave you high and dry. Not to mention, there are many different types of businesses that will lend you money. Some might be better for you, some might not work out. In the new internet age, it can be a challenging task to sift through all the information.

Glossary of Online Cash Advance Terms

No Fax Cash Advance

Cash advance companies that indicate that no fax is required, in effect, do not require you to send them copies of your latest paycheck or bank statement. Cash advance laws vary from state to state, and sites that advertise “No Fax Cash Advances” don’t always tell you whether your state is eligible or ineligible until halfway through the process. If a site promises no fax cash advances, but is unconcerned with where you live, they may be engaging in illegal lending practices.

Fast Cash Advance

Fast cash advance companies claim that cash will be deposited into your account within a couple hours. Generally there’s nothing wrong with this — it simply means that they’re highly efficient and automated. Typically, fast cash advance companies are best for small loans under $600. For larger cash advances, you might consider going with a business that takes its time.

Merchant Cash Advance (MCA)

A special subset of cash advance companies, MCAs offer much higher cash advances of up to $200,000 for customers who can prove to have a large enough revenue stream and fit other financial requirements. They have grown in recent years with the drying up of commercial bank credit. As with any cash advance loan, you should be careful for red flags, and only deal with MCAs that you would trust as much as your local bank.

Top Three Red Flags for Predatory Cash Advance Companies

1. Threats

It goes without saying that if cash advance companies threaten you about anything, you probably shouldn’t borrow from them. Common threats include jail time for a “bounced” transaction or other official language designed to scare you. Legitimate cash advance companies don’t need to scare anyone in order to stay in business.

2. Overly high rates and penalty fees

Oftentimes excessive fees are the result of other unscrupulous practices. The shadier a business is, the more sporadic their income, because people discover such predatory practices early on. As a result, they need to charge higher margins on the people they do bring in. Shop around before settling on a company in order to make sure you’re getting the best.

3. Poor accessibility / customer service

If you can’t find information about fees or requirements on a cash advance lender’s site, you should send them an email. If they don’t respond in a timely fashion, or if their response is cryptic and unhelpful, don’t use the site. They could be trying to scam you.