Credit Card Processing - Business Cash Advance Problems to Avoid

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.

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.

Using Credit Card Receivables and Credit Card Processing

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.

Suggested Business Loan Strategies for Common Business Cash Advance Difficulties

Merchants should be aware that there are at least ten serious difficulties that they need to be prepared for before obtaining a business cash advance. These problems are described below to help businesses avoid these common merchant cash advance and credit card processing obstacles. After each potential problem is described, a suggested credit card processing and credit card receivable factoring solution is provided.

(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) 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) Business Cash Advance and Credit Card Processing Problem to Avoid: Financial statements required. Preferred and highly recommended business cash advance requirement: Financial statements required only when a large business cash advance is desired.

(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 Factoring and Credit Card Processing Difficulty: Pay off the business cash advance over a fixed term. Suggested merchant cash advance and credit card receivables requirement: No fixed term for repayment required.

(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) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: $50,000 maximum business cash advance. Recommended and preferred credit card factoring requirement: $300,000 maximum cash advance.

(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 Ten Credit Card Factoring Obstacles Discussed Above Be Avoided in All Cases?

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 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.

Stephen Bush and AEX Commercial Financing publish the Working Capital Loan - Business Cash Advance Guide and free Commercial Mortgage - Business Loan Reports
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