Credit card factoring is a relatively new financial tool available to small to midsize businesses.  Sometimes referred to as a business cash advance or a merchant loan, it’s slightly different from traditional factoring.  In a traditional factoring arrangement, a business has provided a product or service to a customer, who will pay for that product or service within a certain period of time, usually 30, 60 or 90 days.  Once the product or service has been provided to the satisfaction of the customer, the business may decide that it doesn’t want to wait 90 days to get paid, so they enlist the services of a third party called a “factor”.  Let’s say the invoice amount is $10,000.  The factor may offer to buy the right to collect that $10,000 by paying $9,500 to the business upfront.  The business is willing to pay $500 to have access to his $10,000 right away, and the factor is willing to wait 90 days to get paid because they stand to earn $500 on their $9,500 investment.

Credit card factoring works similarly.  The main difference is that instead of buying the right to receive payments for a receivable that already exists, the merchant loan provider is buying the right to collect payments receivables that don’t exist yet, or future receivables (specifically, future revenues from credit card processing transactions).  There is significantly more risk involved simply because there’s no guarantee that the future receivables being purchased will ever come to fruition.  For that reason, the cost of this type of factoring is significantly higher.  That same $10,000 in receivables may only earn $8,000 for the business.

Because these receivables don’t exist yet, the way that the factor gets paid back is also very different from traditional factoring.  The business instructs its credit card processor to assign a small percentage of every sale to the balance on its contract.  That percentage can range from 5% to 25%, depending on how much future receivables the business is selling.  The percentage is also fixed, so the rate at which the balance gets paid back fluctuates with its credit card revenue.  Let’s say that the percentage agreed upon by the business and the factoring company is 10%.  If the business does $100 in credit card sales, the credit card processor will pay $10 to the factor, and forward the remaining $90 to the business like normal.  Likewise, the business may process $1,000 in sales the next day, in which case the processor will pay $100 to the factor and send $900 to the business.  And if the business doesn’t have any credit card sales the following day, then the factor doesn’t get paid anything.  These merchant loans can take anywhere from just a few months to 18 months to pay back completely, but no matter how long it takes, the amount purchased by the factor doesn’t change.  This type of financing has a fixed cost, so it does not get more expensive over time.  This is why merchant loans are great alternatives to traditional business loans.

The key to finding the best deal on your merchant loan is to let people compete for your business.  There’s a huge advance to working with an account representative at Sure Payment Solutions because we know the industry and have close relationships with the industry’s leading merchant loan providers.  The Sure Payment Solutions staff has helped facilitate over 100 million dollars in business cash advance transactions since 2006.  Give us a call today for a free quote.

A working capital loan is a great idea for any small to midsize business looking for a little help with cash flow.  Working capital loans are usually short term loans used to pay for inventory or current payables such as payroll or taxes.  If you lack the personal or business credit to qualify for a working capital loan from a bank, a business cash advance can be a great alternative.  Like a working capital loan, they are usually short term fixes.  The term can range anywhere from 6 – 18 months.  Business cash advances also do not require that you have a specific use in mind for the funds.  The funds can be used however you need, whether it’s payroll, taxes, inventory, expansion, marketing, or just something to help get through a slow period.

It’s easy to qualify for a business cash advance as well.  The basic requirements are that you’ve been open for business for at least 3 months, you accept credit cards as a form of payment from your customers, and you’re not in open bankruptcy or considering filing for bankruptcy.  A business cash advance can make up to $500,000 in working capital available, depending on the business’s total credit card volume.  Funds are also generally available within 5 – 7 business days of the time you apply.  This form of business funding has become increasingly popular since it’s birth in the late 1990s with a number of cash advance providers and sales offices now offering the product at lower and lower rates.  Business cash advances have truly become a viable and even sought after alternative to traditional lending.

There has been a lot of news lately about mobile phone processing. Using PAYware Mobile, an application for your iPhone or Droid, your Sure Payment Solutions merchant account can be accessed on the go.

A quote from PAYware:

“Wherever your business takes you, card-paying customers can pay you. All you need is the PAYware Mobile device and your iPhone. To reduce pay disputes, all transactions feature geo-tagging, which notes the nearest street or latitude and longitude coordinates.”

For information on pricing, installation, software, or to opening a merchant account, contact our specialists today!

There’s nothing quite like sitting in your local bank branch. The tellers smile when you walk in and your account manager shakes your hand or gives you a hug just to say hello. It’s a very comforting environment until you ask for a business loan application. “Business Loan Application.” Those are curse words at your local bank, whether it be ABC Community or the big boys like Bank of America and Wells Fargo.

Despite years in business and solid credit, banks view any risk of losing money as too much risk. So how does your cozy bank branch earn a profit? FEES!

If you’re paying business checking fees, you might be one of the lucky ones. Customers with no business checking fees should start to be suspicious about why your bank wants you as a customer at all if they’re not lending your money. If your account manager is giving you hugs, it’s time to find out where the damage is being done. So pull out your last month’s merchant processing statement and grab a bottle of aspirin. You may want to sit down for this.

Your local bank is getting rich off your merchant account. The smiles, hugs, and sense of community is all part of the game to lower your guard and bring on the hurt. Ever wonder how 4 banks can survive on the same street without lending any money?

Many business owners, when they become conscious of this fact are quick to rationalize the degrees of safety and comfort gained by knowing their banker in person. “Why go through a merchant processing company in another state and do it over the phone when I’m willing to pay more just to have it in person.” There is nothing wrong with feeling this way but more than likely your bank isn’t even a merchant processor. Therein lies the problem. The majority of banks both large and small are just salesmen for other merchant processing companies.

So while you’re signing on the dotted line in person, your banker will later call up another merchant processing company to actually set up the account. The bank adds on a hefty surcharge to the processor’s cost and voila! the bank is rolling around in your dough.

Keep your free checking where it is but when it comes to a fair deal for accepting credit cards, Sure Payment Solutions is an industry leading provider that is ready to support your business needs. We are BBB accredited and offer a no-obligation proposal to anyone that sends us just 1 previous merchant processing statement.

Have Someone at Sure Payment Solutions Contact You Today

There are many merchant cash advance companies, but only a handful with the experience to do it right. Our specialists have participated in funding over $100 Million since 2006. Competitive pricing is a guarantee, and yet we offer it with speed, efficiency, and the expertise to get the job done.

While Merchant Cash Advance is our most popular financial product, business owners can take advantage of all of our core services including:

• Small Business Loans
• Credit Card Processing Services
• Invoice Factoring
• Credit Repair

Interested to find out what we can offer?

Get a No Obligation Funding Proposal Today!