Avoiding Credit Card Financing and Credit Card Processing Problems
by Stephen A. Bush
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.
Effective and timely use of a prudent working capital business loan is an increasingly critical business financing tool when a business is faced with a short-term cash shortfall. Business owners should be forewarned that there can be a substantial number of potential difficulties in coordinating credit card processing and credit card factoring.
The AEX Business Cash Advance and Working Capital Management Guide -
The Use of Credit Card Processing and Credit Card Factoring
Up to $300,000 can be obtained from a business cash advance based on sales volume and future credit card sales for a business. Most business owners can easily document sales volume and credit card processing activity, so sales volume and credit card processing activity becomes a financial asset to the business.
The AEX Business Cash Advance and Working Capital Management Guide -
Business Loan Strategies for Common Business Cash Advance Difficulties
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) Business Cash Advance and Credit Card Processing Problem to Avoid: Closing costs. Preferred and highly recommended business cash advance requirement: No closing costs.
(2) Business Cash Advance and Credit Card Processing Problem to Avoid: Up-front fees. Preferred and highly recommended business cash advance requirement: No up-front fees.
(3) Business Cash Advance and Credit Card Processing Problem to Avoid: Collateral required. Preferred and highly recommended business cash advance requirement: Collateral not required.
(4) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Financial statements required. Recommended and preferred credit card factoring requirement: Financial statements required only for large business cash advances.
(5) Credit Card Factoring and Credit Card Processing Difficulty: Pay off the business cash advance with required fixed payments. Suggested merchant cash advance and credit card receivables requirement: No fixed payment requirement.
(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) Credit Card Factoring and Credit Card Processing Difficulty: Credit scores of at least 680 required. Suggested merchant cash advance and credit card receivables requirement: Acceptable credit scores of 500 and higher.
(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 Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Up to 24 months of credit card sales required. Recommended and preferred credit card factoring requirement: six most recent months with sales of at least $5,000.
The AEX Business Cash Advance and Working Capital Management Guide -
Can the Business Cash Advance Problems Listed Above Really Be Avoided?
Yes. There are credit card factoring programs which bypass all ten of the obstacles listed. It is unwise to accept any of these difficulties when using credit card sales to qualify for a business cash advance.
It would be a rare situation for all of these potential problems to be of primary importance to a business owner. Most commercial borrowers will encounter several of these problems if they are evaluating business cash advance programs that use credit card processing and credit card financing.
Copyright 1995-2008 AEX Commercial Financing Group and Stephen Bush.
All Rights Reserved.
All Rights Reserved.
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