Cash advances are credit lines in the original technical meaning of words, the repeated use of which is possible at any time by a simple cash order or by means of a transfer. In the meantime, most financial institutions, as well as many consumers, refer to any uncommitted credit as a cash advance, since the money is at the free disposal of the credit customer. With an actual payment of cash, cash advances are rarely associated even in the extended meaning. Only a few lenders offer this at the express request of the customer, since high cash holdings in the bank building increase the risk of attack. Since the Federal Post Office has discontinued the postal order as a service and instead cooperates with a private service provider on the possibility of further cash delivery via them, the costs for the loan delivery by the money-broker have increased so much that this variant of the cash payment is no longer economical. Thus, with a few exceptions, cash advances are transferred to the bank account of the borrower. For a cash advance for self-employed borrowers, a distinction must be made between the company and the privately arranged borrowing.
The classic for private purposes
Most giro banks approve cash advances for self-employed persons for private purposes in the classical sense, by granting a repayment credit on regular payments on the private giro account. In order for the bank to consider the cash receipt as regular, it is advisable to transfer the monthly private withdrawal from the business account to the private bank account, whereby the fluctuations per calendar month should not be too high. Individual banks do not recognize private withdrawals as sufficient cash receipts for approving an overdraft facility, as they understand themselves to be exclusively consumer financial institutions. This reasoning is not comprehensible because the self-employed are consumers with their private money transactions and, consequently, with their private giro account. If the own bank refuses the dispositions framework as cash advance for self-employed, the change of the financial institution is recommended. Also easily available as a cash advance for a self-employed is the availability of a credit card account. The use of the part payment function is possible with most credit cards after a simple registration. However, the disadvantage for self-employed credit card holders is the high interest rates that the card issuer charges for using the installment function. Ideally, self-employed persons only use the interest-free credit function of the card until the following monthly statement.
The cash advance as a freely available loan for private purposes
A cash advance for the self-employed in the sense of a freely available loan does not pay out all financial institutions. Some expressly restrict their credit customers to salaried borrowers and explicitly point this out on their homepage. To ensure that they do not make unnecessary requests and their private credit score does not deteriorate after the rejection of the loan application, self-employed to the appropriate restrictions. The non-loan to independent applicants disbursing financial institutions justify their rejection mainly with the uncertain income. In any case, a self-employed self-employed person lends most cooperative banks and savings banks, since the promotion of self-employed persons is also part of their statutory tasks through the payment of privately required loans. Even the big banks listed on the stock market usually accept self-employed as borrowers. Another way to make a cash advance for the self-employed via the Internet is to offer instant loans without proof of income. In this case, the lender refrains from submitting employment contracts and salary statements so that self-employed people can successfully apply for a loan. In spite of the fact that the monthly income has to be stated, each applicant is obliged to be honest, whereby self-employed persons with seasonally fluctuating earnings can calculate the average monthly value. Consciously overdrawn income data not only violates the business ethos of the self-employed, but also leads, if discovered, to the bank’s right to terminate the loan agreement, regardless of proper installment payments.
Cash borrowing by self-employed for operational purposes
For operational purposes, financial institutions pay a cash advance for the self-employed with few exceptions only in the classical meaning as a line of credit, as they basically ask for further borrowing the purpose and specifically use a project of the entrepreneur. A credit line comparable to the current account credit of the checking account can also be agreed for the company account. In contrast to private accounts, however, the bank may already charge a fee for a business account, not just for its actual use. Of course, the provisioning rates are significantly lower than the borrowing rates for the use of the held on the business account credit limit. For the scope of the credit line in the company account, the usual external receivables are decisive in addition to the turnover and the company profit. A carefully prepared conversation with the corporate client advisor often leads to a significant increase in the credit line provided for the corporate giro account. In addition to the credit line of the company bank account, the company credit card offers self-employed persons the opportunity to make use of another flexible loan.