Business Cash Advances are Quick and Easy to Acquire

While you own your own restaurant there can be seasons when you face the unexpected and find your business in desperate need of business cash advances. Speaking to your local bank or Small Business Administration office may be your first course of action, but don’t bother. Neither is really forking over working capital at this point, and those that do demand such large amounts of paperwork and collateral that it isn’t a real option for many new businesses.

How ironic that the very venues that are supposed to give the business capital don’t, but don’t despair--there is an additional possibility. Your establishment can get business cash advances or merchant account loans through that little credit card terminal sitting on your counter by the register. You got it, the credit card account can help your establishment get capital when you need it. The flexible repayment parameters associated with the program is correlated to your merchant processing receipts and ensures that your payments will be sent directly to the funding company. Analyzing your past merchant statements institutions supplying these merchant loans already know that you are a hit, and they are willing to help you grow further by extending a merchant account loan.

This arrangement, named a factoring agreement, involves you selling the factoring company a percentage of your anticipated credit sales in the future for capital now. Since they already know exactly what you take in on credit sales each day, they know how little risk you pose. That means that you can access $5,000 to $1,000,000 per location for urgent expenses.

The repayment terms that are arranged for your business cash advance is directly correlated to your volume, so you should not have to worry that you will be overburdened. Furthermore, this is a short term loan which you will pay back in a 6 - 12 months at most, freeing up that cash for reinvestment when your establishment is prepared to use it for something else.

Many companies provide credit card factoring for small businesses. Although the program is the same for the most part, there are some significant differences among the companies. Namely, the cost of funds and time frame in which you are expected to return the funds. Although there is not an interest rate or set term, there is a factor rate and a hold back % of your future processing account receipts. Say for instance you receive a factor of 1.32%. This means on a $10,000 advance you will have to pay back $13,200 or $.32 on the dollar at the point it’s all said and done. As for the hold back, if it is 10% this denotes the factoring company will take 10% of your future credit card sales each day until the balance is paid back. So on the above example, assuming you process $10,000 month to month, you will pay back about $1000 per month. This would require a term longer than normally approved. Realistically, your business will attain a hold back of 20% so that you pay $2,000 per month and are complete within 6 months.