My sister is a small business proprietor of a video rental store. On a monthly basis, more than half of her clients pay with a credit card. The business itself has been in existence 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 perspective, it had relatively low 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 returned on time, so we did not think she would be declined. 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 required the funds now so that was not an option.

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

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