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.