Working Capital Business Cash Advance Executive Summary

by Stephen A. Bush

This summary will provide an overview of business advances (which are also referred to as credit card factoring, merchant cash advances, credit card receivables financing and working capital cash advances). For business owners currently assessing their short-term working capital financing possibilities, please call us for a realistic evaluation of your business financing options.

In the current weakened banking environment, the normal struggle to maintain business cash reserves and critical short-term working capital has reached a critical point for many business owners. A growing number of banks are requesting more collateral, eliminating most of their previous business banking functions and eliminating lines of credit for virtually all businesses.

The bottom line for business owners has to be finding effective new sources for working capital financing. AEX has two short-term commercial finance programs that provide short-term working capital up to $300,000:

(1) The least-costly solution (many businesses will qualify) — Short-term working capital loans
(2) For businesses accepting credit cards from customers — Working capital cash advances (summarized in detail below)

The following key working capital business cash advance issues are included in this Executive Summary:

• Five reasons to consider a working capital business cash advance based on credit card financing and credit card processing.
• Ten problems to avoid with merchant cash advances.
• Six criteria for securing working capital financing up to $300,000.
  

5 Reasons for Obtaining a Merchant Cash Advance

• Funds can be obtained very quickly
• There is no need for collateral
• There should not be any up-front fees or closing costs
• A business cash advance based on credit card factoring is one of the few viable options for reliably obtaining short-term business financing
• Credit card financing is available to virtually any business that accepts credit cards in their business transactions

As noted below, there are a number of problems to be avoided with merchant cash advance programs.

• 2-3 years or more in business required to qualify
• Maximum business cash advance of $10,000 to $50,000
• 12 to 24 months of $10,000 to $25,000 (or more) in credit card sales required
• Collateral required
• Up-front fees
• Closing costs
• Financial Statements required regardless of business cash advance amount (Note: larger merchant cash advances can involve additional information such as financials)
• Fixed payments to pay off the business cash advance
• Fixed term to pay off the commercial financing
• High credit scores (frequently 680 to 700) required to qualify

• If leasing: at least one year remaining on lease and in good standing with landlord
• No open tax liens, judgments or bankruptcies
• One year operating history as retail or service business
• Business accepts credit cards as a form of payment
• Ability to document credit card sales of $4000 or more per month for the last six months
• Acceptable personal and business credit (minimum personal credit scores of 500)

It is not necessary to accept ANY of the 10 problems listed above in order to obtain a business cash advance based on future credit card sales. AEX Commercial Financing Group has eliminated ALL of these potential problems from the Working Capital Management Program for their clients. Here is an overview of our credit card financing program:

• No collateral required
• No financials required for most situations (larger business cash advances will sometimes require additional information such as financials)
• Merchant cash advances from $5000 to $300,000
• No up-front fees or closing costs
• No fixed payments (a small percentage of each credit card sale is collected from the processing bank as goods and services are purchased)
• No fixed period to pay off the business cash advance (although there is a minimum of 90 days)