Credit Card Receivables Financing – The New Frontier

As all of you know the financial world as we knew it has changed forever.  Absolutely there still exists and always will exist a variety of financial products and services to serve consumers and businesses.  However, the way banks and financial institutions lend money to businesses and consumers is changing dramatically.  Gone are the days of ridiculously high amounts of leverage employed by banks and amazingly excessive levels of risk assumed.  If you ever felt it was tough to obtain a loan or LOC from a bank before well you haven’t seen anything yet.

About 9 million existing businesses per year apply for funds from a bank and are denied.  One of the only options an existing business had to this point to obtain funds was a merchant cash advance.  Many merchant cash advance companies exist and may be willing to advance your business cash based on your credit card sales activity.  The problem with these cash advances is that they tend to be very expensive and burdensome for a business.  These companies take advantage of customers that are in need of an advance.  Up until recently no competition existed for these cash advances that presented a very reasonable cost of financing option.

Enter Credit Card Receivables Financing.  CCRF exists to serve existing businesses in their need to obtain short term loans.  CCRF in some ways works similar to a merchant cash advance in that the lender will obviously want to see your credit card transaction activity at your business.  One of the biggest advantages of CCRF over merchant cash advances is that they are up to 80% cheaper than an advance!  This saves your business a very large amount of money and monthly cash flow.  CCRF are designed to help a business succeed and payment terms are set up to make it the most comfortable option for the business.

CCRF has several advantages including:

  • Guaranteed lowest rates in the industry for qualified applicants, up to 80% cheaper than the competition
  • NO FEES ever, no application fees, no broker fees, no extra charges
  • Service is executed for FREE and without fees
  • Receive up to 150% of your average monthly volume
  • FLEXIBLE repayment terms that do not strangle the business
  • Poor credit is OK just need a 500 FICO
  • Receive cash in 7-10 business days upon receipt of all documentation
  • Easy, one page application

So, you might be wondering how CCRF can be so much cheaper than a merchant cash advance?  There are a few reasons.  One of the major reasons is because with CCRF there are no fees involved at all.  Brokers and processors and others do not earn any fees.  All compensation to parties involved in the transaction only occurs after funding and it does not come from the business.  Aside from the lack of fees, the main reason is that CCRF does not use “factoring” and CCRF has a much lower “remit rate” than a merchant cash advance.

The Remit Rate simplifies how much you are paying back the lender for the advance.  For example, in a typical merchant cash advance the Remit Rate is 1.40.  So, if you borrow $10K you would pay back $14K (1.4 times $10K).  If the advance company made you pay that back in 6 months that equates to 80% annual interest!

The range for a qualified applicant using CCRF is a Remit Rate between 1.08 and 1.16.  Using this remit rate and a longer payback period (generally between 9-12 months) leaves you with an overall cost of your money that is as much as 80% cheaper than a merchant cash advance.  This is an absolutely huge difference.

Perhaps you are interested in looking into CCRF further.  It certainly would be helpful to know what types of businesses tend to qualify for CCRF.  First, let’s take a look at a couple of screening requisites:

  • Been in business for 18 months or more
  • No open bankruptcies or liens
  • Process at least $3K/month in Visa and MC sales

The businesses most likely to gain approval for CCRF are B2C businesses (business to consumer).  Retail operations that have many, many customers generating numerous daily transactions are best suited for CCRF.  This allows CCRF to keep the costs much lower than an advance because the risk is spread out among numerous business customers.  Think of retail oriented businesses such as shops, restaurants, bars, salons, dry cleaners, convenience stores, etc.

Best of luck to you with your business!

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