From US Business Finance Corp News

Five Reasons Merchant Cash Advances Beat Factoring

Posted in: Business Cash Advance, National Economy
By US Business Finance Corp
Nov 22, 2008 - 10:03:30 AM

Alternative funding for small business
US Business Finance Corp offers alternative funding solutions, such as merchant cash advances, to businesses who are considering factoring as a quick source of operating capital or have not succeeded in obtaining loans from banks. Our merchant cash advance is a far superior alternative funding solution to factoring in several ways.
  1. Most small and mid-size businesses thrive on a large and varied customer base, especially retail stores and restaurants. Factoring usually works best with larger companies who have a consistent customer base with rather large receivables. Cash advances work with companies with monthly Visa or MasterCard sales starting at $2,500.

  2. Factoring can also hinder your efforts to obtain traditional bank financing you are pursuing, since it ties up your receivables. Banks want to see that your accounts receivables  are an available liquid assets able to meet your loan burden.

  3. Factoring usually buys your sales receipts that are only 30 to 90 days away from paying you. Cash advances are buying sales that may be nine months away. For the cost of the money, that can be a very expensive 30 days of time you just purchased.

  4. Cash advances can positively affect your efforts to get traditional financing. A cash advance can improve your credit score if it is used to pay down credit cards to the 50% level, pay off an installment loan or improve your operating capital so that you can make your payments on time. If the advance is used to boost advertising, the improvement in business generated by the advertising helps your cash flow. All these steps improve your ability to obtain a traditional loan.

  5. Merchant cash advances do not send a signal of weak finances to your customers. Since factoring makes your customers send their payments to a third party, they know you are taking a hit on your invoices. With cash advances the credit card processing takes care of the automatic payment, so no third party ever comes between you and your customers.
Contact the merchant cash advance specialist at US Business Finance Corp to see how your business can improve its cash flow and financial positioning with our business cash advance program. Bolster your operating capital without resorting to factoring.

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