Business Finance Recommendations

Category: Finance.

Avoiding business finance problems is always desirable, but it is especially critical to do so when financial issues are intertwined as they are with business cash advance and credit card processing services. Business loan strategic solutions and credit card processing are more connected than most commercial borrowers realize, and changes to either are likely to have measurable impacts on profitability.

There are ten key difficulties which should be anticipated and avoided by following prudent working capital management guidelines. Merchants should take advantage of profitable business finance benefits by successfully coordinating processing and receivables management. Even thriving merchants periodically need more working capital than they can obtain from a bank business loan. The business financing benefits will be especially noticeable if several typical processing and merchant cash advance difficulties can be precluded. One of the most critical business financing tasks for any commercial borrower is to make sure that short- term cash needs are fulfilled. Effective and timely use of a prudent working capital business loan is an increasingly critical business financing tool when a merchant is faced with a short- term cash shortfall. This is frequently difficult and sometimes impossible for the average merchant.

Commercial borrowers should be forewarned that there can be a substantial number of potential difficulties in coordinating credit card processing, receivables factoring and business cash advance services. Most merchants have documented credit card processing activity and sales volume. Using Credit Card Receivables and Credit Card Processing. This documentation of processing activity and sales volume is a financial asset, since up to$ 300, 000 can typically be obtained via a business cash advance based on projected future sales volume. Merchants should be aware that there are at least ten serious difficulties that they need to be prepared for before obtaining a business cash advance. Business Finance Recommendations. These problems are described below to help owners avoid these common merchant cash advance and credit card processing obstacles.

Suggested requirement: No closing costs. (2) Credit Card Financing Obstacle to Anticipate and Eliminate: Fees charged up- front. After each potential problem is described, a suggested processing and receivable factoring solution is provided. (1) Working Capital Management Problem to Avoid: Closing costs. Recommended requirement: Zero up- front fees. (3) Credit Card Processing Problem to Eliminate: Collateral required. Suggested requirement: No financial statements required except for larger business cash advances. (5) Credit Card Receivables Obstacle to Anticipate: Required to pay off the merchant cash advance with fixed payments. Recommended requirement: No collateral required. (4) Credit Card Factoring Difficulty: Financial statements required. Recommended requirement: Fixed payments not required. (6) Working Capital Financing Obstacle to Eliminate: Required to pay off the business cash advance over a fixed term. Suggested requirement: 1 year of ownership. (8) Credit Card Processing Difficulty: Credit scores of at least 680 required.

Recommended requirement: Fixed term for repayment not required. (7) Credit Card Receivables Factoring Problem to Avoid: 2- 3 years of ownership required to qualify. Suggested requirement: Acceptable credit scores of 500 and higher. (9) Credit Card Factoring Difficulty: Business cash advance limited to$ 50, 00Suggested requirement: Maximum cash advance of$ 300, 00( 10) Merchant Cash Advance Problem to Avoid: 12 to 24 months of documented sales of$ 12, 000 to$ 25, 000 or more required. Can the Ten Obstacles Discussed Above Be Avoided in All Cases? Preferred requirement: 6 months of$ 5, 000 or more. There are viable credit card receivables programs which avoid all of the problems described above. It would be a rare situation for all of these potential business finance problems to be of primary importance to an owner.

It is not necessary to accept any of these problems in order to obtain business cash advances based on future sales. Most commercial borrowers will encounter several of these problems if they are evaluating business cash advance programs that use processing and receivables factoring. However, the absence of all ten problems described is a good start toward achieving substantial business finance improvements in working capital management. Commercial borrowers should also be alert for business cash advance and credit card processing problems not mentioned above.

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