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| The Benefits of Credit Card Factoring: Merchant Cash Advances Offer Many Benefits to Small Business Owners |
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Credit card receivables advances are a readily available source of funding for small and even mid-sized businesses. Read on to learn about the many benefits of credit card factoring and how a merchant cash advance can provide your business with the money it needs to grow.
Credit card factoring taps into an asset that many business owners do not know they have: future credit card sales. Getting an advance against future credit card sales provides business owners with many benefits, some of which are outlined below.
Benefit No. 1 of Credit Card Factoring: No Fixed Payments
After receiving an advance from future credit card sales, the merchant’s credit card processing will be automated to pay a percentage of future sales in order to repay the advance. There is no fixed payment required each month, nor are business owners required to make regular payments. The entire repayment process is automated. Each sale made will be credited toward repayment of the advance. And the percentage deducted will not change based on increased sales.
Benefit No. 2 of Credit Card Factoring: Improved Cash Flow
Business owners who find themselves with limited to no cash on hand will benefit greatly from credit card factoring. Credit card factoring provides business owners with a lump sum of working capital. This access to instant cash can help businesses continue operations and expand.
Funds are delivered to business owners in a short amount of time, helping business owners who are in immediate need of capital. There are no banks involved, so the process is streamlined. And, should a business owner decide on a traditional loan, a merchant cash advance has no effect on borrowing from lending institutions.
Benefit No. 3 of Credit Card Factoring: More Access to Capital
Small and mid-sized business owners inevitably need cash to sustain or grow their businesses. However, the majority of these businesses are unable to obtain traditional loans. There are various reasons for this trend.
For the most part, traditional lending institutions are not willing to provide loans to owners who have no or little collateral. Credit history is also a factor, and some owners may have less-than-perfect credit, becoming greater risks to banks. Also, if a small business has only operated for a short amount of time, banks may not want to take the risk of the company going out of business.
In this way, business owners are left in a catch-22 position. They need capital to continue to operate but have not had the time to build collateral and sustainability in order to secure a loan.
This is where merchant credit advances come in. An owner can get an advance against future credit card receivables without having to put up collateral, have his or her credit checked, or worry about repaying a loan. Future credit card sales are automatically deducted to repay the advance.
There Are Many More Benefits of Credit Card Factoring
There are many more benefits associated with merchant cash advances. Business owners can use the funds in a number of ways, such as for emergencies, to improve their facilities, or to buy out a partner. Credit card factoring provides fast cash for small to mid-sized business owners that want to expand their operations with virtually no risk.
Credit card factoring accesses an asset that most business owners do not realize they have: future credit card sales. There are many benefits, and your business will grow as a result.
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