Business Cash Advance Programs

Business cash advance programs and specialized small business funding strategies are often confusing and under-utilized by many businesses which in fact need additional working capital for recurring needs such as inventory and marketing. First and foremost, we want to encourage any business owner to contact AEX Commercial Financing Group directly so that we can help remove some of the confusing aspects about this vital business financing strategy for complex business loans. To assist in this process, we regularly update our commercial finance websites and The Working Capital Journal in order to provide current perspectives and commentary. We have also published a number of articles such as the following to assist in providing a better comfort level for business owners evaluating this approach.

Second, there are some NEW options for short-term working capital financing which should be evaluated PRIOR TO PROCEEDING with a business cash advance program. Since AEX Commercial Financing Group provides merchant cash advances (credit card receivables factoring) as well as the newer short-term commercial loan option AND longer-term business loans, we are uniquely qualified to help small business owners analyze the various choices for business financing. Most providers of business cash advances provide ONLY that business finance service and are therefore overly-biased about the pros and cons of credit card financing. Please understand that we continue to feel that working capital advances based on credit card processing are still a viable alternative for many small business owners in need of more short-term cash. But we feel even more strongly that commercial borrowers should understand what their true choices are before going down that path.

It is important for commercial borrowers to understand that they have more business financing options than they are likely to realize. Non-traditional commercial lenders are increasingly considered to have the competitive edge for a number of commercial mortgage and working capital financing scenarios. The recent turmoil in financial markets has certainly made it more obvious (and painfully clear in most cases) that business owners should not always rely on banks for effective business financing.

There are several business financing problems to avoid when using this strategy, and a merchant cash advance is not the only source to consider for additional working capital. Most businesses which accept credit cards can obtain a business cash advance by using future credit card processing activity. This approach is also known as as credit card financing and credit card receivables factoring.

Business cash advance and credit card processing management is frequently one of the most overlooked sources of working capital for a business. This article will provide a concise and practical introduction to what a business needs to know about using this business finance strategy and how to obtain a merchant cash advance.

Businesses should not overlook the substantial working capital business loan benefits which will accrue to their business by effectively coordinating merchant cash advance and credit card processing programs.

Improved cash flow and reduced costs are key results of successful coordination of these business financing services. Perhaps most importantly, a business cash advance based on credit card processing is one of the few viable options for reliably obtaining short-term commercial financing for many service and retail businesses.

Before we begin, there are two key points to keep in mind. First, business cash advance programs can be a source of confusion and problems, and proper anticipation of these potential difficulties is essential for a business owner considering this working capital strategy. Second, business cash advance programs are often referred to by other names such as credit card financing, merchant cash advance and credit card receivables factoring. 

Although this is a sound and viable strategy, there are pitfalls to anticipate and avoid. Here is a suggested process for reviewing possibilities to improve credit card processing and simultaneously obtain a business cash advance.

Realize that the business cash advance strategy is usually not readily available until a business has been operational for at least one year.

A further limitation is that the business must have been using credit cards as a form of payment by customers. New business owners will nevertheless be wise to educate themselves about this business finance strategy in preparation for possible application a few months down the road.

Determine how much additional working capital your business needs.

In general a business cash advance is typically possible for amounts varying from $10,000 to $300,000 and the amount will depend on the monthly credit card processing volume for a business.

Review your monthly credit card volume as well as cash receipts from your customers during the past six months.

It is not unusual for a business to experience cyclical variations in their monthly receipts, and these fluctuations are generally acceptable in calculating the potential for a business cash advance.

Avoid business finance sites which request that a business owner submit an online application for a business cash advance.

To illustrate the problems associated with an online business financing application, we have prepared a separate business loan report entitled How and Why to Avoid the Online Business Loan Application Trap.

Talk to an experienced business cash advance advisor.

You should avoid high-pressure representatives that make unrealistic promises about how quickly the credit card financing process can be completed. A realistic expectation is that a merchant cash advance can be finalized in a period of two to four weeks. A knowledgeable working capital financing advisor will be able to provide an initial assessment of potential working capital advance options based on information referred to above.

Explore additional resources that will facilitate a better understanding of complex credit card factoring issues.

You should look for sources which will provide relevant strategies and solutions for any business owner contemplating a future business cash advance.

Complete an initial business cash advance application once you are satisfied that you have identified a suitable advisor and provider for coordinating the credit card processing and credit card receivables factoring.

Financing Articles

Six Words Describing Small Business Financing — Small business owners have probably heard multiple reports about commercial lending difficulties, and what commercial borrowers might need most is a more concise explanation about these problems and the resulting impact on their business financing options. This report was produced to provide more understandable insights about some of the most critical business finance issues effecting business owners. Our approach in this report is to describe current commercial finance circumstances in six words. We adopted a similar model in other commercial loan reports such as "seven words describing commercial real estate loans".

Stephen Bush, Chief Executive Officer for AEX Commercial Financing Group, is a nationally-known commercial finance expert and business finance consultant. AEX offers specialized small business loan programs and business consulting for difficult financing situations such as credit card processing loans, working capital funding, golf course loans and funeral home financing. AEX Commercial Financing Group publishes The Commercial Mortgage Guide and provides commercial loan programs throughout the United States.

It is surprising to most observers to see how commercial borrowers needing help with small business loans are now viewing banks and bankers in a totally different light than they were just a few months ago. Because of the sudden change in public perception, it is appropriate to consider revising a famous quote by Ronald Reagan about government solving problems to say "Banks are not the solution to our problem, they ARE the problem." For business owners, the current process for obtaining commercial mortgages and other commercial financing has become a quagmire of frustration and confusion. After reviewing the maze of difficulties involved in the process for refinancing or acquiring new commercial loans, most business borrowers have concluded that the overall banking industry has become ineffective in providing even routine business finance services.

Not to be overlooked in all of this is the practical need for commercial borrowers to find reliable sources for small business loans, working capital financing and commercial mortgages. This will be more difficult than it might initially appear for several reasons.

First, many small business owners have probably been accustomed to dealing with the same bank and banker for many years. There are issues of friendship and loyalty that could cause some businesses to delay longer than they should in replacing their bank.

Second, even after a commercial borrower decides that a change is necessary, it will not be an easy matter to find an effective source for business finance services. In most cases, it will be prudent for business owners to look beyond their local area in the search for better providers of commercial finance funding.

Third, it will require time for business owners to adjust to the fact that some of the best sources for traditional working capital financing are not banks at all. For commercial financing services such as business cash advance programs, banks have played a smaller and smaller role even before the recent economic volatility.