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Business Cash Advances and Commercial Financing Improvements
By plrprousers | September 5, 2009
Making use of merchant cash advance programs based on future credit card processing activity is possible for most businesses accepting credit cards. However, there are a number of critical commercial financing problems to avoid when using this strategy, and a merchant cash advance is not the only source to consider for additional working capital. This strategy is also referred to as merchant financing and credit card receivable factoring.
One of the most overlooked sources of business working capital is credit card receivables factoring. Working capital business loan benefits which will accrue to their business by effectively coordinating business cash advance and credit card processing programs should not be overlooked. Key results of coordinating these small business financing services are improved cash flow and reduced costs. A significant factor is that a merchant cash advance based on credit card processing is one of the most effective options for obtaining short term business financing for many retail and service businesses.
Business cash advance programs can be a source of confusion and problems, and proper anticipation of these potential difficulties is essential for a business owner considering this working capital strategy. Realize that the business cash advance strategy is not readily available until a business has been operational for at least one year. Not all busineesses can participate in this financing approach because the business must have been using credit cards as a form of customer payment.
At the earliest possible point, a determination of working capital needs for your business must be made. The maximum merchant cash advance is based on recent monthly credit card processing volume and will usually vary from $5000 to $300,000. Review your monthly credit card volume as well as cash receipts from your customers during the past six months. It is not unusual for a business to experience cyclical variations in their monthly receipts, and these fluctuations are generally acceptable in calculating the potential for a business cash advance.
Avoid commercial finance sites which require an online application for business cash advances. Talk to an experienced business cash advance advisor. High-pressure representatives emphasizing how quickly the credit card factoring process can be completed should be avoided. A realistic expectation is that a merchant cash advance can be finalized in a period of two to four weeks.
Complete an initial business cash advance application once you are satisfied that you have identified a suitable advisor and provider for coordinating the credit card processing and credit card receivables factoring. Please remember the advice to avoid the online versions for this step. The preferred method for submitting initial documentation is faxing or emailing a completed application directly to the advisor-provider. There should never be any up-front fees or closing costs when obtaining business cash advances.
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