Nov 21, 2022

CAKE versus loan: What your bank branch doesn’t tell you

Loans to impact credit scores drastically, startups lean towards better financing methods

Madison @CAKE
Madison @CAKE

Despite what you may believe, it’s perfectly normal to admit that you don’t know everything there is to know about finances. Especially when it comes to starting a business from scratch — even the best, most successful companies operate with room to grow. However, in order to get anywhere with your business, you need financing of some sort. 

This is where what seems like a straightforward process can get complicated. Depending on the type of financing you opt for, there are different rules, qualifications and types of transactions that have to be made. And some of them can get pretty costly and difficult to understand. 

In this article, we’re going to compare CAKE Capital’s method of financing to bank loans. But before we do that, we need to understand the fundamentals of loans, what CAKE offers, and some of the differences between both options.

Loan Fundamentals 

Loans are defined as simple cash transactions to be paid back over a period of time with accumulated interest. Taking out a bank loan is advantageous in the sense that it allows you to maintain full control over your company. Once the debt is paid back, you will owe no more obligation towards the lender. However, depending on what the loan is being used for, you might face high interest rates and less flexibility with the amount of money you’re borrowing.

Taking on debt in the form of a loan can be a positive thing, depending on what the loan will be used for, however it also poses many cons. Some of the drawbacks of personal loans actually hinder a companies’ ability to scale to its fullest potential. For example, the time it takes to get a loan approved can be weeks, even months. The lengthy process is not only unattractive, but quite frankly, frustrating to consumers. Depending on your initial credit score upon application for the loan, there is a chance of not being approved for the amount of money you’d like. For businesses, not having access to enough funds will make it even tougher to get started. 

 In addition, larger loans will have certain terms and conditions or covenants that you must adhere to. For businesses, this can be a problem because if the banks are unhappy with your credit rate, cash flow, collateral, pre-existing debt, or any other factor, they will likely not approve the loan, or provide you with less money and higher interest. Understanding what information the bank needs is crucial before applying for a loan. 

And, while loans might be a sufficient problem-solver for some, for others, there are better options out there that pose less of a risk and minimal drawbacks; options like CAKE Capital. 

CAKE and how it compares 

At CAKE Capital, our focus is exclusively based on what works best for you as a consumer. Built by a team of experienced entrepreneurs, we offer full flexibility at a competitive starting rate, priced to help accelerate your business growth. Our all-in-one financial ecosystem allows for your ideas to become a reality. 

With fast access to fair capital, CAKE provides zero risk to said entrepreneur from the jump. This means that no goal is too big or too small; rather than facing the stringent requirements of a typical bank loan, our quick and easy transactions allow you to save both time and money, while gaining access to the resources you need, as you need them.

CAKE is a trading platform that differs from traditional banks. To take out a bank loan, the customer is often charged large fees and high-interest rates, while CAKE offers unrestrictive spending, inherently giving customers the ability to fully scale their growth in ways it works for them. CAKE recognizes that optimizing your flexibility, especially as a startup business is crucial for success, which is why we promise no hidden costs, no debt or dilution and no personal guarantee: it’s that easy.  

 For companies with recurring revenue streams, getting approved for a trading limit takes minutes. At CAKE, we will provide you with unlimited spending power (up to $1M) and no additional hidden fees while giving you all the assets you need to be able to expand your business. That’s right; you’re able to unlock revenue on demand all without ‘sacrificing your top line or devaluing your product offering.’ 

One of the many beautiful things about CAKE is that we’re able to aggregate all existing credit bureau services, which helps us deliver a more enhanced company credit risk profile to industries that have long since been underserved. CAKE serves as an all-in-one ecosystem; the platform can be used on its own or alongside equity financing to minimize or eliminate dilution. 

Considering ourselves the all-in-one finance for growing businesses, we have the means and ability to invest in companies that need our help. Because most startups have a set goal in mind, we’re often able to accommodate that and then some. Ever since CAKE was launched, we’ve been able to successfully help companies maximize their growth without dilution or fear of much risk. With CAKE, this is only the beginning of something great. 

Where businesses go to grow.

Get the newsletter that makes reading the news actually enjoyable. Stay informed and entertained, for free.