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We are highlighting ten key difficulties to avoid when seeking business cash advances and working capital using credit card processing. It is especially important for business owners to realize that it is not necessary to accept any of the ten credit card factoring problems.

Credit card processing and small business loan strategies are closely connected in many ways. Business owners should not overlook the substantial working capital benefits which will accrue to their business by effectively coordinating credit card factoring and processing. If the ten most common business cash advance problems can be avoided, the total business benefits will be maximized.

Even thriving small businesses frequently need more working capital than they can borrow from a bank. One of the most important commercial financing needs for any business is ensuring that short-term cash requirements are successfully met. This is frequently a difficult task.

The use of a viable business cash advance strategy has become an increasingly important business finance tool for many businesses faced with a potential short-term cash shortfall. There are a number of common problems (noted below) to anticipate and avoid when businesses use credit card processing to acquire working capital advances.

Most merchants have documented credit card processing activity and sales volume. Since up to $300,000 and more can typically be obtained using a business cash advance based on future sales, documentation of processing activity is a valuable financial asset.

Businesses should realize that there are several recurring problems that should be anticipated prior to using this strategy for working capital business cash advances. Ten common credit card receivables problems that business owners should avoid when employing this strategy are highlighted below.

First, many lenders will attempt to charge closing costs. Business owners should realize that this is an unnecessary transaction cost for business cash advances when dealing with a truly reputable provider of working capital financing based on credit card factoring.

Second, many lenders for these services also charge up-front fees. With the best programs there are not likely to be any up-front fees, and this is a transaction cost that can and should be avoided.

Third, many programs for business cash advances have collateral requirements. For business owners seeking credit card financing, this is an unnecessary requirement and should be avoided.

Fourth, some lenders will require financial statements and tax returns for all business cash advances. Such additional documentation requirements should only be necessary for larger working capital advances.

Fifth, monthly fixed payments to repay merchant cash advances are imposed by some providers. The preferred approach is to avoid such fixed payment requirements.

Sixth, some providers impose a fixed term for repayment. This requirement to pay off the business cash advance over a fixed term should be avoided.

Seventh, many business finance programs require businesses to have at least two years of operating history to qualify for working capital business cash advances. While many business owners can meet such a requirement, a more practical standard for newer businesses is a minimum of one year in business.

Eighth, most providers of business cash advances currently require credit scores of 680 or higher. For many business owners, this can be an insurmountable requirement in the current economic climate. It is feasible to obtain this kind of working capital financing with scores around 500.

Ninth, for merchants needing larger business cash advances, it will be disappointing to learn that many programs are limited to a maximum of $25,000 to $50,000. Providers that are better capitalized for this business finance strategy will be able to accommodate an advance of $300,000 and higher.

Tenth, quite a few programs require up to 24 months of credit card sales of $25,000 or higher. A more practical possibility for business owners will involve a transaction history with six months of $5,000 or more.

It would be unusual for all of the obstacles described above to be relevant for all businesses. Business borrowers are likely to experience several of these problems if they are considering a business cash advance that uses credit card factoring and credit card processing.

Can all ten credit card finance obstacles discussed above be avoided? There are indeed viable credit card receivables programs which avoid all of the problems described. For any business owner considering this approach to working capital financing, it is probably worth repeating that it is not necessary to accept any of these problems in order to obtain business cash advances based on future sales.

Learn about avoiding working capital management mistakes and find out about commercial loans finance strategies – Stephen Bush is a business loans expert => AEX Commercial Funding and Small Business Cash Management

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There are many reasons why I feel the merchant loan will be one of the most sought-out methods of business financing for 2009. Many of those reasons stem from our current economic situation.

Fact: “We are in the worst financial crisis since the Great Depression,” as stated many times by President Barack Obama. It is also a fact that the issues that tipped off the U.S.’s recession ultimately have a domino or ripple affect and in the worst cases can even result in a cycle of economic hardships that is difficult to break.

Example: Banks tighten their lending standards, making it more difficult for business owners to get loans. –> Business owners have to find other ways to finance, such as increasing prices. –> Higher prices cause consumers to tighten budgets, spend less and make fewer purchases .–> As consumers spend less and banks don’t lend, businesses lay off employees to off-set sales decreases. Some even go out of business, leaving countless other employees out of work. –> Dwindling incomes make it even harder for consumers to afford items, causing businesses to take an even bigger hit…and the cycle continues.

So why do I say that this could possibly cause a surge in merchant loan interest? One; as banks lend less, small business owners need an alternative method of business financing, one that relies less on collateral and credit scores and focuses more on promoting business sales. Two; as millions of Americans find themselves unemployed, many of them will view their layoffs as an opportunity to go into business for themselves.

As reported in an article titled “Laid of in 2008? Start a Business in 2009,” George Solomon, associate professor of management and director of the Center for Entrepreneurial Excellence at The George Washington University, “…saw the number of startups increase during the recessions of 1983 and 2001 and predicts they’ll increase in the current economy as well.” These new business owners will very likely need funds to help their businesses grow, funds that can be acquired through a merchant loan.

Small business owners can be eligible to receive a merchant loan when they have owned their businesses for at least six months and their businesses process a minimum of $5,000 in monthly credit card sales. Poor credit scores are not an obstacle when it comes to receiving a merchant loan. In fact, most lenders only require applicants to have a credit score of at least 550.

Maybe you are one of the many small business owners who could greatly benefit from a merchant loan in 2009. Do your business a favor and find out now.

Gaston C. writes articles about Merchant Loans for Merchant Resources International.

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You need money for your business. Under normal circumstances, you’d look into a getting a small business loan. But these are far from normal circumstances. Our economy is in a full-on recession and you need something fresh, something new, something innovative. You need a small business loan alternative.

If you own a retail and/or service-oriented business, you are in luck; because, as its name hints, the merchant cash advance is the perfect method of business financing for merchants.

Clothing stores, grocery stores, restaurants, spas, salons, etc. are all businesses that might be eligible to receive business funds through an advance.

The merchant cash advance is known as the small business loan alternative for many reasons, but mainly because many business owners who have not been able to get funds through a bank have been able to get those funds from a cash advance lender.

In addition, this type of funding typically occurs faster than bank funding, requirements for merchant cash advance eligibility are looser than requirements for bank loan eligibility as well.

Most lenders will require that a borrower has owned his/her business for at least six months and his/her business processes at least $5,000 per month in credit card sales.

The amount of monthly credit card sales that a business processes is very important when it comes to receiving a merchant cash advance. This is because the advances are repaid via a business’s daily credit card sales.

Today’s economy has made small business loans alternatives a more commonly sought-out method of business financing. Try the merchant cash advance for your small business loan alternative.

Gaston C. writes articles about Small Business Loans for Merchant Resources International.

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By now, small business owners have learned that with the economy as is, there is little to no time to wait when it comes to making business decisions. The slightest hesitation can cause significant damage to a struggling business. That is one of the many reasons why business owners are choosing to receive a business cash in advance.

Getting a business cash in advance is easy when working with a merchant cash advance lender. The entire process can take as little as two weeks when done correctly, allowing small business owners to quickly access cash to be used for their businesses.

If you’ve found yourself needing business cash, follow these steps to secure unsecured funds for your business.

First, complete a brief merchant cash advance application. This application will require you to provide information such as your business’s name, type, start date, etc. You will also be asked to submit at least four months of merchant statements. Your merchant cash advance lender may require you to provide up to one year’s worth of merchant statements if your business is seasonal.

Next, the funding specialist that you are working with will review your application and your merchant statements. When reviewing an application, most lenders are looking for three important things. One; that you’ve owned your business for at least six months. Two; that your business processes at least $5,000 a month in credit card sales and three; that you have at least one year remaining on your business’s lease. This process usually takes about 48 hours.

When the review process has been completed, you will be notified of the status of your application (whether it has been approved or denied).

Then, if your application is approved, funds can be wired into your account in as little as 10 business days. There are no restrictions on how the funds can be used, allowing you to make a decision that best suits your individual business.

If your application is denied because you have not owned your business for a long enough time or because the business’s monthly credit card sales volume is not large enough, you may want to wait a few months and reapply for the merchant cash advance.

Finally…well, with the merchant cash advance there really is no “finally”. Instead, it’s more of a continuous cycle, because most lenders allow borrowers to renew their funds approximately every three to four months. Funds can be renewed as many times as the merchant chooses.

Gaston C. writes articles about Business Cash in Advance for Merchant Resources International.

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It time again to revisit alternative financing strategies for business owners needing money. Whether your business needs capital to grow, meet payroll, or to just simply survive, there are numerous alternatives for your company when banks so ‘NO’.

Personal loans are no longer viable options for business owners. Banks have tightened their purse strings on personal credit just as they have with business credit. This tightening typically does not have anything to do with the state of your credit or the value of your collateral. But more reflects their past indiscretions with their depositors’ money. Further, most business owners, over the last two or three years, have already encumbered all of their personal assets, leaving nothing of value to collateralize.

The following lists many alternatives that may still be available to your business. These alternatives allow business owners to capitalize on their previous hard work; be it from building relationships with suppliers and other business partners to closing sales and building a strong customer base:

Using Your Business Relationships!

Trade Credit: It never hurts to work with your suppliers. Ask for better terms; either more discounts or longer time for payment. Here you can reduce your overall costs or allow more time to collect money from your customer before payment is due to these suppliers. Now, your suppliers may baulk at this discussion as they are probably feeling the same pinch as you are. However, impress upon them that it does their business no good (short term or long-term) if you go out of business, have to cut back your standard orders, or are forced to find other suppliers who offer better terms.

In conjunction with trade credit, do all that you can to collect your receivables from your customers, as soon as possible. If your suppliers offer you discounts for early payment, offer the same to your customers (just maybe not at the same magnitude) or offer discounts for cash. This allows you to collect payments faster as well as reduce you costs by paying less for the goods you need to run your business. Just remember, in this type of economy, cash is king.

Using The Strength of Your Customers!

Receivables and/or Purchase Orders: If your business has accounts receivables sitting on its book just waiting to be collected, you maybe able to get cash for those assets NOW. There are cash advance companies (not banks) that specialize in purchasing your receivables. Companies like Bridgeport Capital Service, RTS Financial Services, or Paragon Financial Group. These companies will purchase your invoices for up to 90% of their amount. They will then work with your customers to collect these receivables (saving you both time and money on collection). When the invoices are paid, these companies will refund to you the remaining 10% of the invoice amount. This type of funding is great for struggling companies as these cash advance businesses will focus more on your customers’ credit and business strengths than your.

Many of these same companies will also finance your purchase orders. If you place an order with your suppliers and agree to pay for their goods over time, these cash advance companies will finance these agreements. This could allow your business the opportunity to take advantage of trade discounts (percentages off the purchase amount) as your company will have immediate cash to satisfy your supplier. This is very similar to having a line of credit with your bank but as an individual credit facility for each purchase.

Credit Cards: I not saying go out and get more credit cards. If your business accepts credit cards, there are companies (again, not banks) that may advance cash to your company based on your FUTURE credit card receipts. These facilities are only paid back when your business generates credit card sales. Thus, if you have a slow month, you are not stuck with a huge monthly loan payment. As your credit card sales ebb and flow, your repayment of these advances will ebb and flow in tandem.

Using Your Character!

Need just a small amount of cash to get you by? Try social lending sites like All World Private Funding!, Zopa, Prosper, or Lending Club. These sites create peer-to-peer lending in which ordinary people, who have additional cash, can review your request and contribute to the funding of your loan. The benefits of these programs include getting the money you need, possible lower rates and better terms than most banks offer, and you get to tell your story directly to the lenders.

Similarly, there is Micro-Credit companies. The largest in the US and around the world is ACCION USA. Micro-finance companies limit their total out lay to a maximum of $25,000 per loan. However, most micro-credit funders like to build relationships first with their borrowers. Thus, they may only approve smaller amounts in the beginning and increase your loan amount as you pay back each facility. These companies will also work with startup firms or those that have been turned down by traditional banks and other financial institutions.

Never forget your friends and family. These are the people who know you best and may better understand what you are trying to do with your business. There are many cons with borrowing money from those closest to you but new companies like Virgin Money will help you manage this new relationship. Companies like Virgin will help you keep everything in a business like manner.

Now, while there is a lot of focus these days on traditional banks, most communities also have Credit Unions. Credit Unions are not-for-profit organizations. Thus, they do not have to worry about Wall Street or shareholders. While the majority of Credit Unions have yet to fully adopt commercial lending departments, they should have lending programs in place that will meet your business needs.

Some of these alternative options maybe a little more expensive, overall, then having a single credit facility with a bank. But, they are a sure fire way of leading your company through our current credit drought. The key to success is to do your homework. Find the program that best fits your needs and that will provide the greatest benefit at the lowest cost to your business. Some business owners tend to panic a bit when they begin to feel the credit pinch. It is only natural as raising money for your business is time consuming, time that can hardly be spared in these trying times. But, remember to think about the long term. Don’t just settle on the first source that gets approved, find the best fore you. Be diligent!

Joseph Lizio holds A MBA in Finance and is founder and owner of http://www.businessmoneytoday.com

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As a financial giant files for bankruptcy protection, many small business owners may be worried about what will happen to their businesses, especially those who are already feeling the effects of an economic downturn and are in need of funds. Banks have already been tightening their lending practices and with the recent happenings, experts predict that the credit crunch will only worsen. So where does that leave your small business?

Many business magazines, websites and blogs are offering advice to small business owners for getting through this rough period of time. Businessweek.com offers “Ten Resources for Nervous Entrepreneurs,” Entreprenuer.com advises small business owners how to “Win Sales From Recession-Minded Consumers,” and Blackenterprise.com examines the problems that small businesses face during a bleak economy in an article titled “Small Business on Capitol Hill.”

In addition to these resources, another source of help for small businesses remains. As acquiring a small business loan in today’s economy may be almost impossible, small business owners can find business funding through a business cash advance.

A business cash advance is like a small business loan in the fact that a certain amount of money is lent to small business owners for small business financing, and must be repaid. But there are many differences that make business cash advances a more feasible source of business funds for small business owners than a bank small business loan, especially in today’s economy.

First, borrowers are not required to have excellent credit scores or collateral in order to be approved for a business cash advance. Lenders purchase a business owner’s future credit card receivables. This way, the borrower gets a lump sum upfront, while only a small percentage of his/her business’ credit card sales is deducted towards business cash advance repayment until repayment is complete.

Usually, the timeline from application to funding of a business cash advance is much shorter than that of a bank’s small business loan. This is mostly due to the fact that applying for a business cash advance is very simple, and requires much less preparation, paperwork and documentation than a bank’s small business loan. Business owners are usually only required to submit a short application, at least four months of their business’ credit card statements, and a copy of their business’ lease.

Business owners who may be fighting the effects of an economic downturn may be able to save their businesses if only they could get their hands on some sort of business funding. A business cash advance can provide them with that money when they need it the most.
photo credit: Pink Sherbet Photography

Gaston C. writes articles about Small Business Loans for Merchant Resources International

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Many small business owners in the United States may feel like the problems of the economy have landed directly into their own laps. In this situation it is important to be both pro-active and reactive. Taking early action to offset the financial problems that have already occurred and others to prevent further financial turmoil from arising is vital.

Choosing to receive a merchant cash advance, an upfront sum of cash in exchange for a business’s future credit card sales that can be used at the business owner’s discretion, can be a smart step for a small business owner, in addition to other procedures that can promote healthy business during difficult times.

Believe or not, there are companies that existed during the Great Depression that are still around today. They found innovative ways to make their companies last during a time when the “dollar value” of international trade fell more than 60 percent, an average of 600 banks failed each year, and unemployment rates hit 25 percent.

179-year-old beer-making company, Yuengling and 175-year-old guitar-making company, Martin Guitars, were both featured in a Business Week article titled “Learning from the Great Depression.” In the article, the company’s CEO says Martin Guitars’ resiliency can be credited to remaining fair and equitable and maintaining strong relationships with dealers. He is quoted saying, “Our billing has always been routine…No shenanigans. We don’t offer discounts to high-volume retailers.”

This is advice that many small business owners may be able to benefit from, because their small size and ability to interact with and develop relationships with their customers allows them to deliver customer service that big companies just can’t provide, and can keep customers coming back for the quality service, rather than the low prices.

Also in the article, Dick Yuengling, the current Yeungling CEO, said “…the family kept the business afloat by diversifying into dairy farming, Broadway shows, and dance halls during the Great Depression instead of shutting down or selling out.”

In addition to these tactics that a small business owner can learn from history, some small business owners have tried methods such as cutting back on purchases whenever possible, decreasing employee hours, bargain hunting for the best prices on equipment, etc., and making sure to pay themselves last. But when you’ve tried all of these things and you still find that you need more money, a merchant cash advance may be the innovative step that should be taken by today’s small business owners.

photo credit: Kevin N. Murphy

What makes a merchant cash advance so practical, especially today, are its unique characteristics. Borrowers do not need to have excellent credit to receive a merchant cash advance. They also do not need to provide collateral or personal financial statements. Merchant cash advance payments are deducted automatically from a business’s credit card sales. Therefore, as customers make purchases using their credit cards, a small percentage from each sale is used to repay the merchant cash advance.

Small business owners can get merchant cash advances by finding a merchant cash advance company online, completing a short application and providing a funding specialist with the last four months of their business’s credit card statements.

Gaston C. writes articles about Merchant Cash Advance for Merchant Resources International

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In the experience of many small businesses over the years, one thing is certain – no matter what type of business you start, it is going to require money from somewhere. Although many entrepreneurs are one-person companies, raising sufficient money is often overlooked seriously by many new startups. The word sufficient here is defined as the amount of money that will really make this business succeed through practical and aggressive means.

Most of the time, the passion of starting a new business overtakes common sense and a real clear idea of the startup and operating capital needed is lacking. So it is advised that when you consider shopping for money to start your business, that you do so after completing some form of a business plan. Even if you take money out of your own pocket or borrow on the equity on your home or from your credit card, it is essential that you know ahead of time that it will be well spent.

Let’s take a look at the most popular options for financing small companies.

Credit Cards

This is the easiest type of money to obtain. According to the Small and Medium Size Business Survey of 2007 by the National Small Business Association (NASB) credit cards are the number 1 financing choice of 61% of businesses of 0 to 4 employees. Frequently, the instant that a small business is formed, the owner takes the EIN number to the bank and starts a checking account. Oftentimes, these small business owners are encouraged to sign up for a credit card and offered favorable terms (sometimes 0% financing) for the first few months.

The problem with credit cards is that the interest rate is often very high at 15 to 20% + and according to the NASB, 71% of small and medium-sized businesses are carrying balances from month to month. This has grown from 64% in 2000. The amount of interest expense carried thus obviously affects profitability and cash flow. If credit cards are used as the principal source of financing, the situation is even worse because the amount borrowed is often higher in this case.

The advantage of credit cards is that there are no barriers to this form of borrowing. This is easy money to obtain. There is no system of checks and balances to ensure that the purpose for which the financing is being carried out is qualified by formal business planning and review.

Earnings of the Business

This may seem a bit obvious, but plowing cash back into the firm from earnings is a form of financing. It is important to keep that in mind, because the cash that becomes available from operations could alternatively be used as a distribution to owners or shareholders. Some of these owners may require that they receive distributions. Depending on the stage of the business, this could have deleterious effects on the business, with respect to growth.

Putting money back into the business should be done consciously, with a clear idea for what specifically the money will be used. If the money is getting put back strictly to grow inventory, it may take a much longer time to grow the business. However, if the money is getting put back to invest in systems and people that represent critical choke points in the current business operations, that is a much better plan for higher growth.

Line of Credit

This could come in the form of a business asset or home secured loan. This means that the bank will utilize the company’s property (equipment, building, accounts receivables) or personal property (usually your home) to ensure that they will obtain significant value in the event that you default on your loan. This is also a much easier form of loan to obtain however is best used for incremental financing not a major infusion of cash.

Bank Loan

One of the best strategies early in the business is to establish good relationships with a community bank in your area with assets around $100 to $200 million. Ideally, their investments in the sub-prime mortgage business are limited so that their interest in lending in general is not tainted. Discuss your business and forthcoming lending interests with the individual that has the final say so on the loan approval. Unsecured loans will be the only option for new businesses and usually have serious limitations on the amount that can be financed and usually comes with higher interest rates.

Private Equity Firms

These are venture capital or private investors that will invest in your business in return for some direct control (or say so) into company matters so that they can extract the return that they expect from your company. This requires that you carefully choose from people/firms with whom you develop a good rapport and that are familiar with your type of business.

Private equity is a good choice for small businesses that need to move to the next level due to limitations on the current business that presents obstacles to growth. This is because, the firms that will invest their money will want to see a good operating and financial track record before they inject their money.

Good advice for small companies at this level is to hire an investment banker. Although this carries a cost to achieve this financing, it allows the banker to attend to this specialized form of financing and allow you to keep focused on running your business. One thing is certain, you will be required to complete a formal business plan for this option.

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© Copyright – 2008 Frank Dobner

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BUSINESS FINANCING EXAMPLE ONE – SHORT TERM WORKING CAPITAL MANAGEMENT – Business Cash Advance Programs

For any business that accepts credit cards as a method of payment, a business cash advance is a critical business financing tool that is often overlooked. Even thriving businesses frequently need more working capital than they can borrow from a bank. One of the least-known business financing strategies for successful businesses is potentially the single best working capital management strategy for obtaining needed cash for growing their business: the use of a business cash advance or merchant cash advance program. The most likely candidates to benefit from this working capital loan strategy are retail stores, service businesses, restaurants and bars. The highly-recommended and highly-effective working capital financing strategy uses an under-utilized business asset (credit card receivables) to obtain business cash advances based upon a merchant’s sales volume.

This working capital management strategy is also known as “credit card factoring”. Many businesses have relied upon a working capital financing strategy called “receivables factoring” or “receivables financing” which allows them to sell their future receivables at a discount. Most small businesses cannot adequately document their receivables in order to qualify for this kind of business financing. Many other small businesses (such as restaurants, bars, retail stores and service businesses noted above) simply do not have such receivables to rely upon as a commercial financing tool.

What these businesses do have in many cases is documented sales volume and documented credit card sales activity. It is this documented level of sales volume and credit card sales activity that becomes a financial asset to the business and its business financing strategies. Business cash advances from $5,000 to $300,000 can usually be obtained based on a merchant’s sales volume and future credit card sales. The business financing time period covered by a business cash advance is typically 12 months or less. For businesses that desire to continue the merchant cash advance program beyond this period, it is usually an easy matter to get an additional business cash advance once the initial one has been completed.

As with any successful business financing strategy, there will typically be only a small number of commercial lenders who are effective at implementing the working capital management strategy properly. There are also a number of problems to be avoided with business cash advance programs, so choosing the appropriate provider of this business financing service is extremely important to any business owner considering a business cash advance program.

BUSINESS FINANCING EXAMPLE TWO – SHORT TERM WORKING CAPITAL MANAGEMENT – Short-Term Commercial Mortgage Loan Programs

It is important to note that long-term business financing has a very important place for any business that owns commercial property. Business properties should normally not be financed with short-term funds. When longer-term business financing is appropriate, it is essential to obtain a long-term commercial mortgage of at least 15-20 years (and longer is even better).

However there will be many commercial mortgage loan situations in which longer-term business financing is not appropriate for the business owner. In such circumstances it is important for a business owner to realize that there are viable short-term working capital management options.

For business owners who expect to sell or refinance their commercial property within one to five years, it is especially advisable to explore short-term commercial mortgage loan programs. The most appropriate short-term business financing will have little or no prepayment penalties and “lockout” fees normally associated with longer-term commercial mortgage loans.

While we will not attempt to describe the technical aspects of commercial loan prepayment fees and lockout fees in this article, we will note that the absence of such fees in most short-term commercial mortgage loan programs is a very positive aspect of these short-term business financing options. The lack of such penalty fees could easily translate to a savings of 10% to 30% or more if a business owner needs to sell their commercial property during the time period which would have been covered by prepayment fees and lockout fees in a traditional longer-term commercial mortgage loan.

Although prepayment and lockout fees will typically be avoided with a short-term commercial mortgage loan, there are some trade-offs to be made if a business owner selects shorter-term business financing. When short-term commercial mortgage loans are available, the interest rate will frequently be in the range of 11% to 13%, the loan-to-value will typically be under 70% and such business financing will not be readily available for special purpose commercial properties. The most likely candidates for a short-term commercial mortgage loan are office, retail, multi-family, warehouse and mixed-use commercial properties. The business financing time period typically covered by a short-term commercial mortgage loan is six months to three years.

Just as there are very few highly-effective providers of business cash advance programs, there will typically be a very small number of commercial lenders who are effective at implementing the short-term commercial mortgage loan strategy properly. There are also a number of working capital management problems to be avoided with short-term business financing for a commercial mortgage loan, so choosing an appropriate provider is extremely important to any business owner considering a short-term commercial mortgage loan program.

Copyright 2005-2007 AEX Commercial Financing Group, LLC. All Rights Reserved.

Stephen Bush is the CEO of AEX Commercial Financing Group, LLC. Steve provides commercial mortgage loan and working capital management assistance throughout the United States. Information about free online Commercial Loan Reports and a free online Commercial Real Estate Loan Course is available at select AEX Commercial Financing Group, LLC websites

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One of the basic problems of small businesses is cash-flow. One of the most insidious situations is the one when you start getting long and painful late payments. Mode of payments available for us, and one of the easiest are the credit cards, and the debit cards. Another very safe way of getting paid could be by a cross-cheque, with the name of the entitled written with the account number, either mailed or provided by hand. One way to get paid on time is to even out irregularities and look for clients who can guarantee you payments on time, this will help in better cash-flow.

The best way to get assured and on time payments is by the plastic card, such as the credit or debit cards. This is due to the rapid online system created by the credit card companies. You’ll have a slight charge on the sales made by cards, but those will be negligible in front of the time and money which would have wasted due to the late payments. It is a win-win situation, even if the customer delays payments, you’re not the one suffering. In cases where payments are made by cheques, there is a slight chance of getting late. It could be due to the bank policies, or insufficient funds in the customer’s bank account. But the advantage one has is the cheque itself which is the proof that the person is liable to pay. So considering payments by cheque could be considered as a secured mode of payment. One way is to talk about the payment terms upfront in case of a corporate client. It is important that you explain to the client the terms of payment and why it is important to be on time, for which it is important that the customers receive their invoices on time so that the payments could be made on time well. Cases where customers do not like to make payments via credit cards or by cheque, than provide them with other modes as well. This could generally be in the cases where the amount is quite large, and makes the customer uncomfortable. In this case look for finance companies which are ready to provide small loans, so that the customer could be provided with the facility of financing as well for the products that would have been out of their reach. Even in this case you get your payment on time and its financing company which will have to go after the customer.

I believe that the one of the most suitable mode of payment could be by a card or in the most likely situation cash. There could be no set backs for getting payments in cash accept for the unwanted situations of a robbery. Keeping too much cash at a time at a place is not a suitable idea, due to the risks involved. Which makes the credit/debit cards the best option. The risk, and the effort involved is quite low. The payments are directly debited to the account, and you are convinced that you’ll get your payments. In the case where online trading is involved, credit card is the best available resource to be assured of payment, because it is secured. Considering the fact that now most of the people prefer sitting at home a paying online through a secured and fast method such as credit cards. It even allows the businesses to receive payments without any hassle, and even in certain cases reducing costs. Cheque is another decent mode for payment because even in this case the risk of getting robbed is omitted. But one needs to be careful before accepting cheques from unknown customers; cheques should be usually accepted only from the people whom you have got a certain track record or in severe cases where there is no other option available.

But with keeping all the risks involved aside, the best and the fastest way to get paid is by cash. It omits all the probabilities of being cheated, like with the cases of fake cards, or fake cheques. The moment customer decides to purchase the product and pays, the same moment you earn what you have been working for. It Is indeed the fastest mode of payment available.

Faraz Ali