Today it is very difficult to locate a business who does not currently accept credit cards. The digital age is upon us and very few people are carrying cash. It only makes sense for a business to accept credit cards as a form of payment. While this does create an excellent benefit for the consumer world, it creates new challenges for the business world. One of the biggest problems that affect small businesses in a negative way is waiting for the credit card funds to arrive. There is a solution to this problem. It is called credit card factoring, and it is something that every small business should seriously consider.
How Does It Work?
The fundamental idea behind this type of lending is easy to understand. A business sells their future credit card transactions to a factoring company. The business gets the money for these future credit card transactions before they occur. This lending method has huge benefits. Here are a few of the more interesting.
● Unlike small business loans, there are no restrictions on how the money can be used.
● Any business that currently accepts credit cards can benefit from this form of lending.
● Businesses don’t have to worry about late payments because this is a short term loan that gets paid back through future credit card transactions.
● There is no need for collateral.
● Payments are received faster. Things like payroll and open purchase orders can be paid on time.
● Customers will never know a business is operating this way.
● Most of the times there is no need for a business or a personal credit score in order to qualify.
● Businesses can borrow large amounts of capital using this lending method.
These are just a few of the great benefits this type of lending provides the small business world. Your business could be taking full advantage of all these great benefits.