Avoiding Business Cash Advance and Credit Card Processing Problems

Merchant Warehouse |

December 7, 2010

Avoiding business cash advance problems and credit card processing issues is always a desirable goal for all businesses. It is a critical part of good, efficient working capital management. There are always going to be key elements that businesses need to watch out for in order to avoid the pitfalls of these situations.

Strategic solutions for business loan needs and credit card processing procedures are more closely connected than most commercial borrowers realize, and changes to either are likely to have measurable impacts on profitability. Merchants should take advantage of profitable business finance benefits by carefully, even programmatically coordinating their processing with their receivables management. The business financing benefits will be especially noticeable if several common processing and merchant cash advance difficulties can be avoided.

Timing is Key

Effective and timely use of a thoughtfully prepared working capital business loan is an increasingly critical business-financing tool. It is especially important for those times when a merchant is faced with a short-term cash shortfall. Merchants should always remember that there could be a substantial number of potential difficulties in coordinating credit card processing, receivables factoring and business cash advance services. Timing is not only important, it is a key to making the whole equation come out in your favor.

Most smart merchants have documented all of their credit card processing activity and sales volume, some for many years. This documentation of processing activity and sales volume is actually a kind of financial asset, since loan amounts for a business cash advance are based on projected future sales volumes. What better way to establish that than with historical records?

Typical Difficulties

Merchants should be aware that there are a number of serious challenges that they need to prepare themselves for before obtaining a business cash advance. They must ensure that they maintain or exceed their sales volume, but also their operating margins (profitability). If there were ever a time for instituting smart, money-saving management tools, this is it. If expenses can be reduced while profits remain stable, then the cost of the loan can essentially be carried without a penalty to the cash flow and company financial plan.

Even the most thriving of merchants needs more working capital from time to time. Sometimes they will need more than they can even obtain from a bank business loan. Merchants need to understand the importance of making sure that their short-term cash needs are met. The difficulty in this can be an uphill battle for the average merchant. The key is not to get ahead of yourself. Never get in too deep with cash advances. They can become a huge hole that you won’t be able to climb out of. Use them wisely and get out of them as soon as you can. Don’t let your business become another statistic.