By: Daniel Samoohi
Submitted: 2010-09-20 10:37:46 | Word Count: 377
A Merchant Cash advance is a little utilized financial practice that gives necessary funding to entrepreneurs from their credit card processor. entrepreneurs realize that they have this option and head straight to family or a bank when they need capital to pay for expansions, repairs or upgrades of their stock and equipment. If you are a business in need of funds immediately, you should look into this method of restaurant financing as well.
The thought behind factoring is a bit like selling futures. You, as the merchant, agree to sell future credit card sales at a lesser price to the factoring company. The funds is given now in exchange for anticipated revenues in the next several months.
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These agreements are most commonly for the short term, rarely more than 1 year, and are a great way for a company with a verifiable credit card sales history to attain needed funds.
Unlike a bank loan, where the repayment term is fixed for the duration of the loan, a factoring arrangement takes into account the fact that in almost every business there are great months and tough ones. Your payment is directly tied to your credit card revenues, as a portion, not a set payment.
If you have chosen to pay a 10% daily capture and you take in $8,000 one month, your payment that month comes out to $800. In the next month you may take in 10,000 dollars and pay $1,000. This flexibility is a great option for a growing company though restaurant financing.
Another benefit of a merchant cash advance is the speed in which the cash turns up in your bank account. While a bank may take several weeks of deliberation and dictate how you use the money when and if they give it to you, with a factoring agreement, you will have the money in about a few business days, and you can apply it to whatever you see fit.
Author Resource:-
Since early 2008 Daniel Samoohi has assisted 1000's of business owners in finding credible providers in order to review quotes for Restaurant Financing. By making lenders compete with each other, Daniel assists businesses in finding great bargains for Restaurant Financing.
