Small Business Credit Card Options – Factoring

June 11th, 2009 | Posted in Small Business Credit Card

Small Business Credit Card Options. Factoring is getting a loan against future credit card sales. Not all small businesses will qualify but it is a valid credit card money saving option.

Bail Out Your Small Business With Credit Card Factoring
By Gaston Castro

While perusing the internet for the latest in business news, I came across an article announcing the launch of Office Depot’s new “Small Business Self-Bailout Plan.” Through its “Survival of the Smartest” website, the company provides small business tips and strategies, news and information and even “weekly videos featuring products and services designed for small business,” writes Jennifer Wang for Entrepreneur.

After reading about this “self-bailout plan,” I couldn’t help but to think about how business owners could bail themselves out through credit card factoring. Okay, well it’s not exactly a bailout, but it can definitely be a great help and even a business lifesaver, for the many merchants who can’t seem to get business funds through banks.

Even those who under normal circumstances would be able to secure bank loans are now unqualified. In fact, “…many national banks have drastically cut back small-business lending. In addition, Advanta, a major issuer of small-business credit cards, declared on May 12 that it was closing customer accounts to new charges,” writes Scott Medintz in a New York Times article titled “To Get a Business Loan, Know How the Banks Think.” That said, factoring is very appealing to many small business owners right now, for the following reasons.

Simple Requirements

Own a business for six months, process at least $3,500 in monthly CC sales, have a year or more left on the business lease and don’t have unresolved bankruptcies – that’s all you have to do to qualify for a credit card advance. Business owners who meet these requirements can easily receive up to $500,000 in business funds, simply by selling their businesses’ future CC sales.

Fast Funding

Credit card advance providers can usually fund merchants in 7 to 10 business days and the approval only takes 48 hours. The speed of the process is a definite plus for busy small business owners who don’t have time to waste.

Flexible Payback

Credit card factoring is the process of selling future credit card sales in order to get cash in advance. When one takes advantage of factoring, the repayment is also taken care of via credit card sales. When customers make purchases with their credit cards at a business that is utilizing credit card factoring, a small percentage of those sales goes toward repaying the credit card advance. This repayment method goes with the flow of each business owner’s individual business.

Automatic Renewal Eligibility

Three to four months into a credit card advance, the merchant becomes eligible for a renewal. The second time around and from then on out, the merchant does not have to complete any applications and he/she can have funds wired into his/her account in 48 hours.

Gaston C. writes articles about Credit Card Factoring for Merchant Resources International.

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