A merchant cash advance is a little used financial method that provides needed funding to merchants via their credit card processor. Few merchants realize that they have this option and head directly to family or a bank when they need money to pay for expansions, repairs or upgrades of their stock and equipment. If you are a business in need of money immediately, you should look into factoring as well.

The concept behind factoring is something like selling futures. You, as the business owner, agree to sell future credit card sales at a discount to the factoring company. The funds is received now in exchange for anticipated sales in the next several months.

These agreements are most commonly for the short term, rarely more than 1 year, and are a excellent way for a merchant with a verifiable credit card sales track record to obtain necessary working capital.

Unlike a bank loan, in which the repayment schedule is set for the entirety of the loan, a factoring agreement takes into consideration the fact that in almost every business there are great months and bad ones. Your payment is directly tied to your credit card receipts, as a portion, not a set number.

If you have chosen to pay a 10 percent daily capture and you take in $8,000 one month, your payment that month comes out to 800 dollars. In another month you may charge $10,000 and pay $1,000. This flexibility is a great thing for a growing company.

An extra benefit of a merchant cash advance is the quickness,short time in which the working capital turns up in your hand. While a bank may take several years of decision making and tell you how you use the cash when and if they give it to you, with a factoring arrangement, you will have the funds in about a few business days, and you can apply it to whatever you deem fit.

Since early 2008 Daniel Samoohi has assisted 1000’s of business owners in finding reputable lenders in order to compare offers for a merchant cash advance. By making lenders compete with each other, Daniel also helps businesses in finding great deals for merchant cash advances.