The Complete Idiot's Guide to the Credit Card Advance

Before you close this page in disgust, let me first point out, my goal in writing this article is not to offend you by unwarranted name-calling, but to take you from a credit card advance novice to a credit card advance expert.

It is impossible to make a sound decision before being educated on the subject matter in which you are deciding upon. People usually make decisions based on pros, cons, opportunity costs and opportunity benefits. After weighing these, the option that has the probability of bearing the most positive outcome is chosen. But how does one know which option this is without sufficient research?

Sadly, credit card advance ignorance can often lead to one of two outcomes. One; a business owner who could greatly benefit from a credit card advance completely writes it off as a form a business funding, and deprives him/herself of the opportunity to experience all of the benefits of a credit card advance and suffers the consequences of having inadequate business funds. Or two; a small business owner who would be better off not getting a credit card advance gets one before learning about whether or not it would be good for his/her business, abuses it and also suffers the consequences.

Before you end up falling into either of these categories, read on and learn the basics of the credit card advance.

What is it?

The credit card advance is an alternative method of business financing. Business owners have the opportunity to receive $5,000 to $500,000 for there businesses. It is suitable for use by owners of retail and/or service-oriented businesses. In order to be eligible for a credit card advance, an applicant must accept credit cards from customers and process at least $5,000 in monthly credit card sales. The applicant must have also owned his/her business for at least six months prior to applying for the advance.

How does it Work?

Now that you know what a credit card advance is and whether or not you are eligible to receive one, it’s time to learn what sets the credit card advance aside from many other sources of business funding.

Credit card advance repayments work differently from other traditional methods of business financing. When a borrower accepts a credit card advance all repayments are automatically made. Whenever customers make credit card purchases, a small percentage from those sales go toward repayment. This method allows repayments to be flexible, fluctuating along with the business’s sales. Therefore, the amount of the advance you receive (plus a flat rate) is paid back entirely via your business’s credit card sales.

It usually takes about six to eight months for a credit card advance to be completely repaid.

How Much Can You Get?

Business owners can typically receive anywhere from $5,000 to $500,000 through a credit card advance. But the actual amount that one can receive is based on the amount that his/her business processes in credit card sales. Most lenders will not fund an amount that they feel is too much for a business owner to repay, in attempt to not hurt the business.

Benefits

The process of receiving a credit card advance (from application to funding) can take as little as two weeks. Credit card advances can also be renewed approximately every three to four months. When a business owner decides to renew his/her advance the funds can be wired into his/her account in 24 hours.

The flexible repayment procedure is formulated so the repayments do not hurt a borrower’s business. And there are no penalties for early or late repayments.

What You Will Need

You will first need to complete an application. The application is usually very short. You will also need to submit four months to one year of your business’s credit card statements. Most lenders will also require that you submit proof that your business has at least one year remaining on its lease. You will also be required to provide identification to ensure that you are in fact the owner of the business.

Setbacks

Not for everyone:
If your business does not accept credit cards you can not receive a credit card advance. If you feel that a credit card advance will benefit you, begin accepting credit cards for four to six months and then consider applying for a credit card advance.

Expensive Money:
Receiving a credit card advance can be expensive. It should not be done unless it will be used to help a business.

Making educated decisions is always very important. Now, you have the tools to determine whether a credit card advance is right for your business.

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