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Business loan strategic solutions and credit card processing are more connected than most business owners realize, and changes to either are likely to have measurable impacts on business profitability. Merchants should take advantage of profitable business loan benefits by successfully coordinating credit card processing and credit card financing. The business financing benefits will be especially noticeable if several typical credit card processing and merchant cash advance difficulties can be precluded. Even the most successful businesses regularly need more financial resources than they can get via a working capital business loan. Perhaps the single most important commercial loan goal for any business is to successfully meet day-to-day cash requirements. This can be an impossible task if working capital is not properly managed. 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. Using Credit Card Receivables and Credit Card Processing Most merchants have documented credit card processing activity and sales volume. This documentation of credit card processing activity and sales volume is a financial asset, since up to $300,000 can typically be obtained via a business cash advance based on future credit card sales and sales volume. Ten Business Cash Advance Problems And Recommended Business Loan Solutions Before employing this strategy, businesses should realize that there are several recurring potential problems that they need to anticipate. Ten common credit card receivables problems that business owners should avoid when employing this strategy are highlighted below. Preferred/Recommended business cash advance requirements are shown after each potential credit card processing and credit card financing 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) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Collateral required. Recommended and preferred credit card factoring requirement: No collateral required. (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) Business Cash Advance and Credit Card Processing Problem to Avoid: Fixed term to pay off the business cash advance. Preferred and highly recommended business cash advance requirement: No fixed term for repayment. (7) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Several years in business required to qualify. Recommended and preferred credit card factoring requirement: one year in business. (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) Business Cash Advance and Credit Card Processing Problem to Avoid: Maximum business cash advance of $10,000 To $50,000. Preferred and highly recommended business cash advance requirement: Maximum cash advance of $250,000 to $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. Can the Business Cash Advance Problems Listed Above Really Be Avoided? 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 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 2005-2007 AEX Commercial Financing Group. All Rights Reserved.
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About the author: Stephen A. Bush will provide candid business loan - commercial mortgage loan advice. Sign up for a free series of Commercial Loan reports Click here to get your own unique version of this article.
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