As if there weren’t enough of them out there, this blog will be centered around the high-demand field of business and merchant cash advances. In today’s economy, there are many businesses, most exclusively small and private-owned businesses, that are having a less-than-easy time at keeping their doors open and their operations afloat. As with most unexpected economic setbacks, the temporary decline in customers and subscribers to their services can be deadly crippling to these businesses. Many small business owners are faced with impending bankruptcy; with the realization that closing the doors to their once affluent businesses is likely imminent. However, with new concerns regarding finances, come new solutions to the problem.
One of the biggest trends in small business lending today is credit card factoring; known in terms as “business cash advance” and “merchant cash advance.” These types of alternative funding are definitely outside the realm of “the norm,” and can sometimes be confusing to understand. Credit card factoring is the process of essentially selling your future credit card sales to an institution that provides you with your business or merchant cash advance. When you apply for this funding, you will provide a history of your business’ credit card sales, in the form of merchant account statements. Once it has been proven that you meet the required criteria, you will generally have your funding instantaneously, or at least within one business day. But what is that criteria?You are required to have an established merchant account,but your sales are not required to be at an unreasonably high level. Usually, consistent processing of just a few thousand dollars a month is enough to qualify you.Bad credit? No problem!
With a business cash advance, you are selling your future credit card sales, you are not financing an unsecured loan with no collateral. Now that we know what it takes to be approved for a cash advance, let’s discuss how it works.You submit your application, along with the required documentation proving your credit card processing sales volumes,Your application is approved You receive your cash advance,And don’t even have to think about repaying it. Yes, that’s right; repayment is automatic. There are no set monthly payments, no wondering what’s going to happen if you don’t make enough sales on a particular month to make the required revenue to make your loan payments. Remember, cash advances are the selling of your future credit card sales. Once you have your cash advance, a percentage of every one of your credit card sales goes directly towards repayment of your advance, though the percentage of such is always low enough that you don’t have to worry about losing all of your business’ credit card income. Now that we’ve been properly introduced and educated on the processes and inner-workings of credit card factoring and cash advances, discussing current events and trends as related to such will be nothing but simple.