Are you in the retail business? Do you need a fast and reliable money solution? If so, credit card factoring may be the answer you are looking for. The latest business financing technique affords retail business owners that conduct significant credit card sales fast and easy access to working capital financing, giving you the cash that you need, when you need it.
What is Credit Card Factoring All About?
Though a business cash advance is not as structured as a loan, but rather, is a cash advance. Instead of providing a cash advance against your invoices, credit card factoring gives you a lump sum payment in exchange for giving a part of future credit card receipts to the provider who offers the cash advance.
Similar to receivables factoring, this type of cash advance is given at a discounted rate to the projected face value of your credit card receipts; however, instead of collecting on invoices, the provider who offers you this cash advance option is entitled to all of your daily sales that are paid with credit cards. For instance, the provider who offers you the business cash advance may give deposit $10,000 into your account today, in exchange for $12,000 of your future sales. A pre-determined percentage of your daily credit card sales will be collected by the lender until the $12,000 is recovered. The collection of funds is spread out over a set period of time, which means it won’t have a negative impact on your business; when it’s slow, you pay less, and when it’s busy, you pay more.
In comparison to a business line of credit or a bank loan, which has a set date that the money has to be repaid via fixed payments, there is no due date with credit card factoring, which gives you incredible flexibility while solving your immediate financial needs.