Small business owners have it tough these days with traditional loans and banks well out of reach. There are a number of advance loans and micro loans out there, but many are afraid of hidden language, penalties and requirements.

Two of the more well known options are Advanced Funds Network (AFN) and PayPal Working Capital. Both are recognized in the United States, Canada, and England and both have had positive media regarding their products.

So, how do you choose which one is best for your small business?
First, look at how long both have been in the advance loan business. AFN has been working loans since 2007 while PayPal just launched their working capital product in the United States.

Since AFN has been around a while, it has a number of reviews about its product and service. The Better Business Bureau gave it an "A" rating and TopCreditCardProcessors.com awarded AFN with "Best Processor Winner" this past July. PayPal's product hasn't been tested enough to have any accolades.

Each offers slightly different products with AFN offering more variety. AFN products include an unsecured line of credit, merchant cash advances and a bad credit business loan. PayPal offers only merchant cash advances.

The other difference is in loan repayment. AFN has two options for repayment and the small business owner has an element in control regarding both of them. In the first option, the business owner and AFN agree on an amount to be repaid out of sales receipts. This is a great option because it is based on sales alone and taken directly from sales, so you don't have to worry about a payment coming due on a certain date.

The second option is a fixed loan repayment schedule. This is for people who have steady business with revenue from several financial streams and want to know a specific date for repayment for budgeting purposes.

With the PayPal product, the only option available is out of sales receipts coming through their merchant services. Also, their first repayment is due within three days of applying and receiving of the money. There are no other options. For some small business owners, three days isn't enough to recoup sales to make a repayment.

With AFN, their customer service representatives work with you to determine the date that repayment begins.

Another difference between the two companies is in customer service. AFN has live customer support and loan representatives assigned to your application. So, you don't get someone different every time you call. You know their names and, most importantly, they know yours. You get individualized service.

At PayPal, you get whoever answers the phone that day and may find yourself repeating your information multiple times.

AFN is different from PayPal in another very important way. They can offer larger advances up to $500,000. PayPal Working Capital bases their funding criteria solely on how much money flows through their merchant services, so those loans will be much smaller. That funding criteria doesn't help you if you do a lot of business with other services, in cash, or checks.

AFN considers all of that. Its funding criteria is based on merchant accounts combined and also considers gross sales in all categories.

Another big difference revolves around merchant services. To qualify for the PayPal product, you had to have been using PayPal merchant services for a while. That's because the company bases its approval solely on your merchant services history with them.
AFN can approve you even if you don't have a merchant services account.

It can also approve you if you have bad credit or no credit. In fact, 85 percent of those who apply to AFN for a loan get approved. Approval can happen with a few hours, but sometimes takes a couple of days, depending on the type of loan. Small business owners receive their money within 24 hours after the paperwork is signed. AFN promises that most loans are completed with money in your account in less than a week.

So, business owners seeking serious cash to move their business forward would find Advance Funds Network the most helpful in reaching their goals.