Freelance Cash Advance

What is Freelance Cash Advance and How Does it Actually Work?

According to a recent study, 36% of Americans are now freelancing. That’s 59 million people who are contributing some $1.2 trillion to the U.S. economy, but traditional business financing all too often leaves these savvy, ambitious individuals out in the cold. Lendesca is aiming to change that by offering all kinds of freelancers, from consultants and gig workers to Airbnb owners and Etsy sellers, access to a freelance cash advance.

Is a freelance cash advance a viable financing option for your business? Read on to help you decide.

How can 1099 workers and the self-employed benefit from a freelance cash advance?

A freelance cash advance is an advance payment of up to $5,000 to freelancers, 1099 workers, self-employed individuals, or small business owners. It can be used for whatever you need, from a new computer or office furnishings to an additional employee or a down payment on a business vehicle. The amount you borrow is paid back over time with debits automatically deducted from your future sales.

Is a freelance cash advance a smart source of financing for your business? If you’ve been in these situations, the answer is probably yes:

• You have the ability to make money, but an expense you can’t afford to pay outright is keeping you from conducting business.
• You need financing to make an investment like a new hire or additional equipment that will increase your earning potential in the future.
• You have a reliable but slow-paying customer whose outstanding invoice is putting a strain on your working capital.

Say you’re an Uber driver needing to replace the transmission on your vehicle. This unexpected expense will run you $3,000 or more, but it’s also preventing you from working and making additional income. If you can’t afford the repair out of pocket, you could have to rent a car and work to save up the money for weeks—an additional cost that makes getting back on your feet (or rather, wheels) take even longer. With a freelance cash advance, you can afford to repair your car and get back out on the road quickly, keeping more money from each ride in your pocket. 

Should you consider other financing options besides a freelance cash advance? Yes, if:

• $5,000 isn’t enough to pay your expense outright or cover a down payment on a more significant purchase, in which case a merchant cash advance could offer an alternative.
• You want to open an account for future emergencies, in which case a business line of credit is a better choice.
• You want to pay back a larger amount over an extended period, which is possible with a financing product such as an SBA loan or business term loan.

A freelance cash advance is sufficient for relatively small business expenses, but it won’t be enough to fund a new business location or an expensive piece of machinery. For these needs, you’ll need to get approved for a commercial mortgage or equipment financing, which both offer greater loan amounts and longer repayment terms.

Qualifications for a freelance cash advance

How to qualify for a freelance cash advance

What a freelance cash advance lacks in sheer spending power, it makes up for with ease of use. Qualifying for a freelance cash advance doesn’t require a credit check, and the most stringent requirement is a three-month history of business. We’ll look at your previous three months of banking statements to see how much you can afford, and once approved, you could have your money in minutes.

Interested in seeing how much you could qualify for? Fill out our loan application and we’ll be in touch. As a bonus, you’ll also find out if you’re eligible for other financing options your business could need now or further down the road.

Pros and cons of a freelance cash advance.

It’s easier to qualify for a freelance cash advance than some more traditional financing options, but you should still weigh these pros and cons before borrowing:

Thanks to its broad applicability and the potential to fund equipment purchases up to $5 million, equipment financing should at least be on the radar of financing options for any small business owner.

Our take on a freelance cash advance

A freelance cash advance is a relatively new financing option that reflects the rise of freelancers, side hustles, and self-employment here in the U.S. Is this type of financing right for your business? That’s up to you, but we’re excited to offer an option that extends capital to some of the people who need it the most—people who might have had limited borrowing options in the past. If you’ve been turned down for traditional financing options such as SBA loans, business term loans, and short-term loans, a freelance cash advance could be just what you need to take your business to the next level.