Types

There are two main types of payday loans. They are business payday loans and personal payday loans. Many payday loan lenders offer both types of loans.

A personal payday loan is available to an individual. Normally, they require a person have employment, a minimum monthly salary, and a checking account. Some will also require an applicant have access to a fax machine. When an applicant applies for the loan, the lender will take his or her most recent check stub for proof of employment and monthly salary. After the lender has approved a cash advance, the applicant will need to write a postdated check. The lender will cash the check when the loan becomes due. An individual payday loan can be approved the same day a person applies.

A cash advance business loan works in a similar manner to a personal cash advance, but it is only available to businesses, and it often requires more information to be submitted. Cash advance merchant loans carry more risk for payday lenders than personal loans, because merchants typically receive a much higher loan amount than individuals. While cash advances for individuals will often be capped at $1000, merchant cash advances can go as high as $250,000. Merchants who apply for a payday loan will generally need to submit six months of their most recent business statements and bank statements. The statements will be used to determine if the merchant is eligible for the loan, and if they are eligible, the amount they will receive. It will generally take about five business days for a merchant cash advance to be approved.