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Business owners should constantly assess the measurable working capital management improvements which will accrue to their business by successfully coordinating credit card processing and credit card receivables because credit card processing and business loan strategies are closely connected in many ways that directly impact the bottom line of a business. These benefits should be further enhanced if a number of common credit card processing and business cash advance obstacles can be eliminated. Even thriving merchants periodically need more working capital than they can obtain from a bank business loan. One of the most critical business financing tasks for any business is to make sure that short-term cash needs are fulfilled. This is frequently difficult and sometimes impossible for the average business. The use of a viable business cash advance strategy has become an increasingly important commercial financing tool for many businesses faced with a potential short-term cash shortfall. However, as noted below there are a number of potential problems to be anticipated and avoided when businesses use credit card processing to seek a business cash advance. The Use of Credit Card Processing and Credit Card Factoring Most businesses have a documented sales volume and documented credit card processing activity. It is this documented level of sales volume and credit card processing activity that becomes a financial asset to the business. Business cash advances up to $300,000 can be obtained based on a merchant's sales volume and future credit card sales. Ten Business Cash Advance Problems And Recommended Business Loan Solutions There are a number of critical problems that business owners should be aware of before a business cash advance is obtained. The most serious problems associated with credit card processing and business cash advances are listed below so that they can be easily avoided by businesses. Recommended and Preferred merchant cash advance and credit card processing requirements are shown after each potential credit card factoring problem. (1) Credit Card Factoring and Credit Card Processing Difficulty: Closing costs charged. Suggested merchant cash advance and credit card receivables requirement: Closing costs not required. (2) Credit Card Factoring and Credit Card Processing Difficulty: Initial up-front fees. Suggested merchant cash advance and credit card receivables requirement: Up-front fees not required. (3) Credit Card Factoring and Credit Card Processing Difficulty: Collateral required. Suggested merchant cash advance and credit card receivables requirement: No collateral requirements. (4) Credit Card Factoring and Credit Card Processing Difficulty: Financial statements required. Suggested merchant cash advance and credit card receivables requirement: No financial statements required except for larger business cash advances. (5) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Required to pay off the merchant cash advance with fixed payments. Recommended and preferred credit card factoring requirement: Fixed payments not required. (6) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Required to pay off the business cash advance over a fixed term. Recommended and preferred credit card factoring requirement: Fixed term for repayment not required. (7) Credit Card Factoring and Credit Card Processing Difficulty: Two years or more in business required to qualify. Suggested merchant cash advance and credit card receivables requirement: In business for one year. (8) Business Cash Advance and Credit Card Processing Problem to Avoid: high credit scores (680 to 700 or higher) required to qualify. Preferred and highly recommended business cash advance requirement: Credit scores of 500 or better. (9) Credit Card Factoring and Credit Card Processing Difficulty: Business cash advance limited to $50,000. Suggested merchant cash advance and credit card receivables requirement: Maximum cash advance of $300,000. (10) Credit Card Factoring and Credit Card Processing Difficulty: 12 to 24 months of credit card sales required. Suggested merchant cash advance and credit card receivables requirement: Most recent six months at $5,000 or more in sales. Can Credit Card Financing Difficulties Described Above Always Be Eliminated? There are viable credit card receivables programs which avoid all of the problems described above. It is not necessary to accept any of these problems in order to obtain business cash advances based on future credit card sales. It is not likely that all ten of the described obstacles will be pertinent for all business owners. Business borrowers are likely to experience several of these problems if they are considering a business cash advance that uses credit card factoring and credit card processing. Copyright 2005-2007 AEX Commercial Financing Group. All Rights Reserved.
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