My sister is a small business proprietor of a video rental store. On a monthly basis, over half of her customers pay with a credit card. The business itself has been in business for the past ten years, so it has been well established. Until this past year, the business has realized profits every year, so in a lending sense, it had relatively little risk. Because of the ill economy this past year, my sister went to the bank to inquire about a working capital business loan. This was the second time she had applied for a loan, and the first loan had been repaid on time, so we did not think she would be refused. Four weeks later we heard back from the bank and were told that they felt her business was too risky, so they were not going to supply a loan. They said we were welcome to reapply in six months, but we needed the funds now so that was not an option.

We did not have a credit line available to us, so we needed to find a source of cash and this had to be done promptly. She had many bills that were due and any delayed payment would have been regrettable because the vendor would not send out her inventory. This would have angered many customers and hindered our business operations. After an deep search, we found out about credit card factoring. A.K.A. a merchant advance. This process gave us the funds we needed to fulfill our vendors. So how does it work?

The first step was to be qualified with the company to receive the cash advances. Credit card factoring does as its name denotes and focuses on the business’ credit card lot. Most lending companies need at least five thousand dollars monthly in credit card revenue. Once you meet this requirement, it is relatively simple to find funds. We receive the finances from the lender and repayment is made automatically whenever we resolve the credit card batch. For any small business seeking funds, this is a great way to find funds for your business.