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Home | Internet & Businesses Online | Webmasters Even thriving small businesses frequently need more cash than they can borrow from a bank. One of the most important commercial financing needs for any business is ensuring that short-term cash requirements are successfully met. This is frequently a difficult task. 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 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. Suggested 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) 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 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) Business Cash Advance and Credit Card Processing Problem to Avoid: 2-3 years or more in business required to qualify. Preferred and highly recommended business cash advance requirement: 1 year in business. (8) Credit Card Processing and Credit Card Financing Obstacle to Anticipate and Eliminate: Credit scores of 700 required to qualify. Recommended and preferred credit card factoring requirement: Credit scores of 500 to 700 acceptable. (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 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 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 2005-2007 AEX Commercial Financing Group. All Rights Reserved. Article Source: http://www.articlewheel.com
Contact Stephen Bush at AEX Church Financing for unique and straightforward business financing advice
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