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Is Credit Card Factoring, or a Merchant Cash Advance, Right for Your Small Business?
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As a small business owner in need of immediate capital, you may have been considering credit card factoring, also known as merchant cash advances, as a source of fast cash. While merchant credit advances can provide needed capital in a short amount of time, take some time to learn more about the process to determine if credit card factoring is right for your small business.

What Is Credit Card Factoring?

Small business owners should be aware that there is a source of fast cash they can tap into that will help grow their businesses. Credit card factoring, also known as a merchant cash advance, credit card receivables financing, and accounts receivable factoring, is essentially a cash advance based on future credit card receivables. Any small business that can show a steady income from credit card sales is eligible for an advance based on projected receivables.

How Credit Card Factoring Works

First, your small business will be qualified. To be eligible small businesses must show a steady inflow of credit card sales. The total amount of sales required each month is determined by the company providing the service but can be about $5,000.

Once qualified, you’ll simply need to determine the amount of money you need. Again, the limits vary, but the cash advance can be anywhere from $5,000 to $1 million. Once you receive the money, you can spend it just about any way you’d like to expand your business.

The process to pay back the advance is simple. An automated system will be set up through which a percentage of every credit card sale will go to the advance company. There is no fixed time frame to repay the advance, providing your small business with flexibility.

The Benefits of Merchant Cash Advances

Merchant cash advances based on credit card receivables provide small businesses with many benefits. Small business owners can obtain a quick approval on a credit card receivable advance. The entire process is quick and easy. There is no lengthy application to fill out, and no collateral is required.

Many small businesses have all their capital tied up in fixed expenses, such as overhead, inventory, advertising, human resources, and insurance and taxes. Credit card factoring allows small businesses to obtain cash in a short amount of time to use to expand operations, open new locations, and go forward with a plethora of other ventures.

Best of all, credit card receivable advances are renewable, providing small businesses with an ongoing source of capital. So long as small businesses continually receive credit card sales, cash advances will be available. Part of the original balance does need to be paid down first, but once that is done, a small business can receive another advance.

Obtain a Merchant Cash Advance to Grow Your Small Business

If you are a small business owner in need of fast cash or are looking to expand your small business, then a merchant cash advance is the answer you’ve been searching for. For more information and to determine how much you can borrow, talk to a knowledgeable agent today.


On the Net

MerchantCreditAdvance Blog

MerchantCreditAdvance FAQ

United States Small Business Administration


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