Advantages of Credit Card Factoring

Though many pundits claim the recession is officially over, other still feel its pains as this economic slow period appears to keep hanging on. Too many small businesses are feeling the sting of the slowdown in terms of weaker sales, fewer customers, and less foot traffic. Yet as sales dip, expenses such as payroll, overhead, equipment and more remain as high as ever and before you know it you are struggling to keep your head above water let alone make any real money. As revenue dries up, cash flow becomes a problem and this can be the undoing of your business.

Secure Cash Quickly with Credit Card Financing

Advantages of Credit Card Factoring
The good news is today a number of options are available to small business owners to secure cash to keep their businesses moving forward through the difficult times. One option many businesses may not be familiar with is called credit card factoring. Based loosely on the alternative financing practice of invoice factoring, credit card financing enables your business to get cash quickly by betting on credit card sales in the future. As the business owner, you then agree to pay this cash advance back in gradual increments over a period of time. In this way, credit card receivables financing is similar to a short-term loan for small businesses. The terms of the agreement are clearly set out for you so that you can familiarize yourself with the process.

Credit Card Factoring Companies Won’t Run a Credit Check

Credit card receivables factoring can be a suitable option for small businesses that are unable to secure traditional business financing from a corporate bank due to poor credit score, their start-up status, or lack of established credit history. With few exceptions, Credit card factoring companies will not run a credit score on a company seeking credit card financing and instead will focus on your monthly revenue, sales, credit card transactions and the like. Though factoring credit cards will generally cost your business more money than other options such as small business bank loans and standard factoring accounts receivables, it is a viable option for businesses with cash flow issues that rely heavily on credit cards for point of sale transactions.

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About the Author:

Robert Bernfeld started in the commercial finance industry in 1974. His early years included positions with Aetna Business Credit and Foothill Group. During the next thirty five years. Mr. Bernfeld established both equipment leasing and accounts receivable factoring companies. He partnered in founding Business Facilitators, Inc. in 1999. Mr Bernfeld graduated from the University of California, Riverside in 1974 and received his Juris Doctorate from Loyola University School of Law in 1977.

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