While you manage your own business there will be times when you face the unexpected and find your business in desperate need of a business advance. Talking to the local bank or Small Business Administration office might be your first course of action, but don't bother. Neither is really forking over capital at this point, and the few that do demand such large amounts of paperwork and collateral that it isn't a viable option for many small businesses.
It is ironic that the very venues that are supposed to give the capital aren't, but don't despair--there is an additional choice. Your company can get a business advance through that little credit card terminal sitting on your counter by the register. That's correct, the merchant processing account can help your company get financing when you need it. The flexible repayment parameters associated with the program is correlated to your merchant processing revenue and ensures that your payments get sent straight to the funding company. Looking at your past merchant statements companies extending these merchant loans already know that you are a success, and they are willing to help you move further by extending a business advance.
This arrangement, named a factoring agreement, involves you selling the factoring company a percentage of your anticipated credit sales in the future for money now. Since they already know how much you take in on credit sales each month, they acknowledge how little risk you pose. That means that you can access $5,000 to $1,000,000 per location for needed expenses.
The repayment terms that are arranged for your business advance are directly connected to your receipts, so you should not have to worry that you will be overburdened. Also, this is a short term advance which you will pay back in a 6 - 12 months at most, freeing up that cash for a reinvestment when your company is prepared to use it for something else.
Many companies provide credit card factoring for small businesses. Although the program is the same for the most part, there are some significant differences among the companies. Namely, the cost of funds and time frame in which you are expected to return the capital. Although there is not an interest rate or set term, there is a factor rate and a hold back % of your future credit card receipts. Say for instance you qualify for a factor of 1.32%. This means on a $10,000 advance you would have to pay back $13,200 or $.32 on the dollar once it's all paid back. As for the hold back, if it is 10% this requires the factoring company will take 10% of your future credit card sales each day until the balance is paid back. So on the above example, assuming you process $10,000 month to month, you will pay back about $1000 per month. This would require a term longer than normally approved. Realistically, your business will receive a hold back of 20% so that you pay $2,000 per month and are finished within 6 months.
It is ironic that the very venues that are supposed to give the capital aren't, but don't despair--there is an additional choice. Your company can get a business advance through that little credit card terminal sitting on your counter by the register. That's correct, the merchant processing account can help your company get financing when you need it. The flexible repayment parameters associated with the program is correlated to your merchant processing revenue and ensures that your payments get sent straight to the funding company. Looking at your past merchant statements companies extending these merchant loans already know that you are a success, and they are willing to help you move further by extending a business advance.
This arrangement, named a factoring agreement, involves you selling the factoring company a percentage of your anticipated credit sales in the future for money now. Since they already know how much you take in on credit sales each month, they acknowledge how little risk you pose. That means that you can access $5,000 to $1,000,000 per location for needed expenses.
The repayment terms that are arranged for your business advance are directly connected to your receipts, so you should not have to worry that you will be overburdened. Also, this is a short term advance which you will pay back in a 6 - 12 months at most, freeing up that cash for a reinvestment when your company is prepared to use it for something else.
Many companies provide credit card factoring for small businesses. Although the program is the same for the most part, there are some significant differences among the companies. Namely, the cost of funds and time frame in which you are expected to return the capital. Although there is not an interest rate or set term, there is a factor rate and a hold back % of your future credit card receipts. Say for instance you qualify for a factor of 1.32%. This means on a $10,000 advance you would have to pay back $13,200 or $.32 on the dollar once it's all paid back. As for the hold back, if it is 10% this requires the factoring company will take 10% of your future credit card sales each day until the balance is paid back. So on the above example, assuming you process $10,000 month to month, you will pay back about $1000 per month. This would require a term longer than normally approved. Realistically, your business will receive a hold back of 20% so that you pay $2,000 per month and are finished within 6 months.
SHARE
