Business Cash Advances and Working Capital Financing Executive Summary
Short-term working capital has always been an ongoing struggle for small business owners. Realistically there are very few effective sources for short-term small business loans in the current lending environment. Many commercial banks are reducing or eliminating lines of credit, asking for more collateral or discontinuing their business lending altogether.
The bottom line for most commercial borrowers is to determine where they can find short-term business financing if the previously-dependable working capital sources are no longer helpful.
AEX Commercial Financing Group can provide two effective options for consideration in solving this problem:
(1) Short-term working capital loans — Usually limited to $100,000 and not all businesses will qualify for this option.
(2) Business cash advances — For businesses that use credit card processing as a primary method of customer payment, maximum will vary from $100,000 to $300,000 (and not all businesses will not qualify for the maximum) depending on the type of business and length of operating history.
The summary below is designed to provide a concise and thorough overview of business cash advances (also referred to as merchant cash advances, credit card factoring and several other variations). For business owners evaluating their working capital options, we hope that you will review this summary and then call us for a candid and detailed discussion about your commercial finance options.
The following Business Cash Advance overviews are provided in this Executive Summary:
- Five reasons to consider a business cash advance based on credit card receivables factoring.
- Ten problems to avoid with business cash advances.
- Six criteria for securing a business cash advance and working capital financing up to $300,000.
5 Reasons for Obtaining a Business Cash Advance
- There is no need for collateral
- Credit card financing is available to virtually any business that accepts credit cards in their business transactions
- A business cash advance based on credit card factoring is one of the few viable options for reliably obtaining short-term business financing
- There should not be any up-front fees or closing costs
- Funds can be obtained very quickly
10 Problems to Avoid with Credit Card Processing and Merchant Cash Advances
As noted below, there are a number of problems to be avoided with credit card financing programs.
- 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
- 12 to 24 months of $10,000 to $25,000 (or more) in credit card sales required
- Maximum business cash advance of $10,000 to $50,000
- 2-3 years or more in business required to qualify
6 Criteria for a Business Cash Advance up to $300,000
- 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
- No open tax liens, judgments or bankruptcies
- Acceptable personal and business credit (minimum personal credit scores of 500)
- If leasing: at least one year remaining on lease and in good standing with landlord
AEX Working Capital Financing Program
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 Financing Program for their clients. Here is an overview of our commercial finance program:
- Business cash advances from $5000 to $300,000
- No up-front fees or closing costs
- No financials required for most situations (larger business cash advances will sometimes require additional information such as financials)
- No fixed payments (as goods and services are purchased, a small percentage of each credit card sale is collected from one of the processing banks)
- No set term to pay off the business cash advance (although there is a minimum of 90 days)
- No collateral required
- Easy 2-page application AEX Commercial Financing Group can fax or email the application for its Working Capital Financing Program to you. This application will be requested only AFTER a discussion with AEX. Please note our policy provided below about avoiding the use of online business finance applications.
AEX Business Financing Application Policy
A borrower working with AEX Commercial Financing Group will not be asked to submit an application until they have completed a detailed discussion with AEX confirming that working capital financing is feasible for their particular business situation.
There are numerous business cash advance and business loan sites that urge commercial borrowers to complete an application before a business owner even has a conversation with a prospective lender. By completing an online commercial finance application, business owners would be submitting confidential business and personal information to a lender before they should.
AEX Commercial Financing Group STRONGLY advises business owners NOT to complete an online commercial funding application.
