alternative to cash advance

Need a cash advance? Consider using CardUp instead!

A cash advance is one of the first things that comes to mind for business owners who need access to money fast.

There’s a good reason for it – It is relatively easy to qualify for a cash advance, with minimal paperwork required and no restrictions on how the cash is used. However, cash advances incur very high fees, which you are charged for the moment you receive money. This cost is often so high that it negates any short-term benefit you may receive from a cash advance.

Furthermore, if your credit card company sees you’re using cash advances, your credit rating might be affected and you might get flagged as a risky borrower.

An alternative to cash advances – CardUp

As a more affordable, less risky alternative to cash advance, why not access the pre-approved credit line on your credit card and make your business payments via CardUp for Business?

CardUp allows you to shift any spend currently made by cash, cheque or bank transfer onto a credit card. This enables you to pay large business expenses with your credit cards, such as rent, payroll or supplier invoices. This effectively frees up your cash on hand greatly.

By using CardUp as an alternative, you will enjoy:

  • Instant access to pre-approved credit for payments – no cumbersome paperwork or lengthy application processes required
  • Interest-free funds for up to 55 days, from when your card is charged until when your credit card bill is due
  • Flexibility and convenience – you use your card for payments on a per transaction basis, and all your payments are tracked online from an online dashboard

Use your existing credit cards as an interest-free financing tool for your business. Find out more.

Here’s how using your credit card via CardUp compares to a cash advance:

1) Speed of financing

Speed of financing

Using a cash advance

You can apply for a cash advance at an ATM, via iBanking or over the counter. Whilst it is a quick way of accessing finance; it usually takes two to three working days for the bank to process a transfer. Furthermore, if you’re planning to withdraw money directly from an ATM, this will require pre-approval from your credit card issuer.

Using your credit card with CardUp

On the other hand, your credit card comes with a pre-approved line of credit which you can access almost instantaneously. Together with CardUp’s online payments platform, you can make card payments to almost any recipient, which means you’re able to tap on this credit line for any payment you require anytime and anywhere.

Signing up for a free CardUp account takes just a few simple clicks, and you’ll be ready to go within a few minutes.

 Cash advanceCredit card with CardUp
Where?ATMs, iBanking, over the counterAnytime, anywhere
Speed of approvalAt least 1 working dayAlmost instantly

2) Low fees and an interest-free period

Interest-free periods

Using a cash advance

Cash advance interest rates are significantly higher than purchase interest rate, with banks charging up to 28% per annum for this service. When you borrow cash via this method, there is no grace period, and you will be charged a high rate of interest immediately. This means the money you owe will start mounting up very quickly.

Using your credit card with CardUp

With your card’s credit line, the interest is not charged right away. If you tap into the existing credit line on your business card and use CardUp to make all your major business payments, you will enjoy interest-free funds for up to 59 days, until your next credit card bill is due. With processing fees starting from 1.5% per transaction via CardUp – which is significantly lower than the fees that the banks charge – it is a much cheaper financing method for your business.

Example based on financing $20,000 for 55 days

 Cash advanceCredit card with CardUp
Total$2,130$300
Upfront fees6%* = $1,2001.5% = $300
Interest rates29% p.a.* = $9300% = $0

Using CardUp is almost 86% cheaper as compared to taking a cash advance directly!

*Average rates obtained from: Value Champion SG, MoneySmart

Access instant credit for your business from just 1.5% per transaction.

3) Flexibility

Flexible offering

Using a cash advance

A cash advance does offer a certain amount of flexibility. Getting this type of funding is relatively easy, and cash advances have high approval rates. However, the amount of cash you may obtain is subject to a limit imposed by the Bank in relation to the status of your account. There are also maximum daily limitations on the amount of cash you can extract.

Using your credit card with CardUp

This option offers you much greater flexibility. You aren’t restricted to a certain percentage of your credit limit or a maximum daily limit, there is no ceiling on the amount of finance you can access, as long as it is within your card’s pre-approved credit line. CardUp also offers other flexible benefits, you can keep track of your payments online using the CardUp dashboard, access the platform anytime, anywhere and schedule your payments in advance if you forecast an impending cash flow crunch.

 Cash advanceCredit card with CardUp
AmountMinimum and maximum daily limitsUp to pre-approved credit limit, and on a per-transaction basis

So do away with sleepless nights and avoid sky-high fees by using CardUp to make all your big business payments! Not only will you gain instant access to finance and save huge sums of money but you will also reap all the rewards and benefits of your credit card.

Still need help considering between the different financing options for your business? Here’s a free guide to help you compare between them easily:

Free download: The comprehensive 1,500-word guide to financing options for your business

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