Check Cashing Benefits for Small Business Owners

Advantages of Check Cashing for Small Business Owners

Everyone, at some point in their life, will seek the financial services. The one who needs it in a larger frequency is the small business owners, at least in the first few years of their journey. They’ll have more financial obligations, but at the same time, there’ll be more challenges, while they are arranging the funds.

The process of arranging the funds is not easy. There are many attributes that contribute to this. For instance, if you are taking a small business loan, then you’ll have to qualify many pre-requisites. In addition to that, you should have a good credit history, solid bank statement, more assets than liabilities or the loan equivalent collateral.

In 2014, when Federal Reserve Banks conducted a survey, in which they found that only half of the small business owners who applied for loans received the financial assistance.

It is one of the reasons why we see most of the times businesses fail because they do not get money at the need of the hour.

In the recent times, we can see that the check cashing services is gaining prominence among small business owners. The larger percentage of people is taking online lending services because they understand that it’s easier and quicker to access funds under the service.

The check cashing centers cash various check types. Normally, the list includes government checks, union checks, insurance settlement checks, payroll checks, income tax checks, money orders, bank drafts, and much more. In a few words, all the checks payable to your business can be cashed.

In this post, we’ll learn how a small business owner can get some benefits from the check cashing process.

Before that, let’s have a look into this.

Why Check Cashing Process Matters?

It matters for the health of your small business.

Generally, it doesn’t matter how you receive funds. Whether you take a loan or get crowdfunding, you should have money when your business demands it.

Reports from Jessie Hagen cited that 82% of small businesses fail due to the poor cash management skills. It’s obvious that you face the problem of paying or running your business operations, because, you are facing the problem of getting paid on time. I mean that could be one of the reasons.

Or the chances are you are following a very bad finance model, like giving huge credit terms for all the customers. The result is you’ll be having a huge number of invoices and bills but no cash.

You are definitely rich in your account books, but practically you are cash-poor.

Now, this where the check cashing process will come into your aid. You have a huge number of unpaid invoices and even though the dates are approaching you cannot wait because you need money immediately. You can submit these checks or invoices to the check cashing centers and get paid for the amount specified in the cash.

One more thing, suppose your invoice is amounting to $5,000. Then you’ll not be paid that complete amount. A certain percentage will be deducted as the service charge.

Whatever the case, you’ll have some good money that you can access instantly and meet all your business finance needs.

Let’s see what a small business owner will gain having immediate money in his hands. Look into the following points and analyze the importance of the check cashing process in a better way.

Advantages of Check Cashing Process

No Dealing with Time-Consuming Bank Procedures
Taking check cashing services you can easily meet your short-term financing needs. Not just that. But you’ll avoid all those time-consuming things that you are normally required to carry out while taking out a business loan from a bank.

You are a busy person; still, you’ll invest your valuable time standing in the long lines, just to be rejected for some reason.

On the other hand, you’ll not work so much visiting a check cashing center. Apart from a small upfront fee, you can cash all the checks payable to your business on the spot without wasting much time.

Access to Money in a very Less Time
Even qualifying a short-term loan takes time in traditional banks. You have to submit papers, qualify all the required criterions, and finally, wait for some business days and get your money.

This process will not help you if you need emergency funds. You tax date is approaching and you cannot extend that. Receiving funds after that will be of no help.

Under the check cashing process, you don’t have to wait for long business days. Just submit your checks and get paid on time. Even the conditions for qualifying a small business loan will not be so difficult to qualify.

Managing Payroll will be Easier
If you have not realized, then the prepaid card trend is on.

As per the reports from prepaidcards123, in 2012 alone the prepaid card transactions topped 9 billion. It’s not just the small business owners, even individuals and salaried employees are getting benefit out of this.

When you pay your employees with checks, even they have to visit the bank before it closes down, then do some little work and finally get money. This is an inconvenient option for employees working in different shifts.

If you are using prepaid cards, then you can provide your employees with prepaid payroll debit cards. Instead of paying in checks, you can direct deposit the amount that is to be paid. All the employees working in non-traditional hours will not have to wait long to have their money.

Clearly, it’s a win-win situation for both employees and business owners.

The Upshot
In the recent years, many small business firms have switched over to the online lending services from the traditional bank solutions. The reason is they are able to experience better convenience and accessibility in having funds. Check cashing process is one of the forms of online lending services, which offers the same.

A deeper look into this service, then you’ll realize that check cashing process is truly a great alternative banking solution over the traditional bank services.