04Jul
A merchant account loan is an unsecured advance of working capital on moneys a business will recognize in the future, frequently offered by private financial institutions. Not like the normal loan, working capital is secured with future credit card revenues and entails a great deal less paperwork than a conventional small business loan attained from the bank. Ideal for entrepreneurs that don’t have a large number of years of work history under their belts, a merchant account loan provides desired working capital immediately.
Banks review five characteristics when determining whether to provide a business loan. These characteristics, called “the 5 Cs,” are as follows: character, capacity, collateral, capital and conditions. As normal loans are only provided to those entrepreneurs with flawless credit and a verified history, it is understandable that many businesses simply do not make the grade.
The items needed for a merchant account loan are less tough, and payment schedules are likewise more flexible. Repayment is tied directly to the credit card purchases earned on a daily basis. Nevertheless, the entrepreneur should use a bit of due diligence when applying for such working capital.
Even though a reputable merchant loan agent will give the desired funds at a reasonable price, others will attempt to charge exorbitant interest, require up front burdens and have unreasonable default terms. Reviewing the fine print is needed.
While many business advisers will suggest that locating funding from family and friends, credit cards and personal savings are better choices, they are not very realistic. In addition, it can take time to receive such financing, and it really is best not to do business with family and friends. Turn around time on this type of working capital is most commonly less than a a few business days, and with no set payment numbers, a merchant account loan is a great way to acquire cash quickly without involving additional parties.
Dating back to early 2008 Daniel Samoohi has aided 1000’s of merchants find reputable lenders in order to compare quotes for a merchant account loan. He also helps start ups as well as seasoned businesses find competetive deals for credit card processing in order to accept credit cards as a payment method for their businesses.
Tags: Business Cash Advance, Business Economics, Business Loan, Credit Card Factoring, Economics, Finance, Loans, Merchant Account Loan, Merchant Account Loans, Merchant Advance, Restaurant Loans, Small Business, Small Business Loan
13Nov
‘Phishing’ is one of the most common techniques used by scammers today. If you don’t want to be a victim of this scam, it’s time to make yourself aware.
Scammers use phishing to try to obtain information from an unsuspecting victim illegally. The way it works is the person doing the phishing sets up a fake website or sends out an email claiming to be from a legitimate organization, asking you to input your personal information and bank account number. The’90s saw the first traces of this scam, but it’s still popular today.
Advanced scammers often use the same logos and designs as real-world companies so as to appear legitimate. These ‘wolves in sheep’s clothing’ will then trick victims out of their information by directing them to a website asking them to input their information. Those who fall for this scam often do so because they are unaware of the scam and have done business with the company before, so they don’t think anything of receiving an email or link from the company.
Phishing scams affect business owners as well as consumers. Businesses who have a online presence are likely to feel the effects of such crimes as victims, but not in the same way consumers do. Consumers now are more careful with what information they give to online merchants and organizations, often hurting legitimate online sources. The Federal Trade Commission encourages such vigilance and works to root out those scammers who take advantage of the system.
Not every website can be trusted, even though most credit card companies accept online applications. Before submitting any sort of online application, check the company’s reputation and make sure they’re a legitimate company. The Better Business Bureau rates companies based on their track record and allows consumers to make complaints. Even if you don’t find anything bad about a company, that doesn’t mean everything is fine. Do your research and find out for yourself.
Another important tip is using a site that operates on a secure server. You can easily tell the difference between a safe site and a not-so-safe site if you know what to look for. First, the URL should say ‘https://.’ The ’s’ at the end of ‘https://’ means the site is secure. There will also be a tiny icon that looks like a lock in the bottom right side of your browser window. The site is safe when it is in the ‘locked’ position.
I will teach you all about Business Credit including how to get millions in your credit line, now that sounds great right? Come over and read for yourself!
Tags: Business, Business Credit, Business Loan, Credit, debt, entrepreneur, Finance, financing, Loans, Raising Money
27Jun
Paul Counts asked:
Working capital tends to be in short supply for new or growing businesses, and that is why many entrepreneurs and business managers devote lots of time and stress into coming up with capital for their business. The good news is that locating capital for a business isn’t as difficult as one may think. Using account receivables or invoices a business can obtain instant capital by selling them off to a “factor” for a small discount. This process is known as an account receivable credit line because most of the time the “factor” will give the business a type of “credit line”.
Account receivable credit line financing works great because most of the time startup and growth companies, in particular, simply can’t afford to wait for customers to pay on invoices, or they get in a bind if the customer pays late. It is much easier to get approved for this sort of financing than for a standard business loan from a bank. The flexibility of account receivable credit line financing is attractive to businesses in need of capital.
Your business could choose to factor only a few invoices or all invoices. You are by no means required to factor all account receivables. Since you are actually selling the invoice to the factor you have the freedom to choose which company to sell the account receivables to, and you of course control when you sell them. You would sell the account receivables for a discount to the factor.
The company you sell your invoices to would then be in charge of collecting payments from your clients, processing the payments, and also generating reports. This is another positive for businesses that decide to factor invoices. Your client would be notified of the billing address change.
There are some requirements laid out by the factors who offer an account receivable credit line. Since they are taking on a risk for your clients they will want to make sure that your client is creditworthy. Your businesses credit won’t need to be established to qualify, but your client will need good credit and references as to their payment history. Many new businesses don’t have business credit scores established, so an account receivable credit line allows younger businesses to get capital without long application processes.
This is also the only form of capital that grows as your business grows. As your sales grow, so does the amount that you can factor, or the amount of capital your business has access to for faster growth. Your business could take advantage of supplier specials or other special deals to save money, or the money could be used to pay your bills early to receive an early payment discount with some suppliers. The list of benefits goes on and on.
It is important to know your business capital options.
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Tags: Business Loan, Business News, Time Startup
31May
Tags: Business Loan, Business Location, Cash Flow
23May
Kris Koonar asked: Transportation Company owners have to face a typical situation in dealing with clients who pay the freight bills in 30 to 60 days. They have daily cash expenses to take care of. They have to pay the driver’s wages, fuel bills, and vehicle and tire repair expenses. The expenses have to be met urgently while the clients would delay paying the amount for many days. This puts them into a tricky situation with regard the cash flow for their needs. Unless the company has cash in the bank, they cannot afford to wait to be paid.
The owners try to sort this out by arranging for a loan from the bank. But the banks usually do not finance businesses that have less than three years of profit and financial statements to show. So what other option does a freight company have? They have a better option than business loan in freight factoring. It is a quick pay tool to convert slow paying client freight bills into cash. It does not need the clients to pay early. It is the factoring company who will buy the freight bills on delivery of the load and give you some percentage of the amount of the freight bills.
They even collect the bills from the clients on the due date. Generally they would provide you an advance of 90% of the bill amount. The remaining 10% is paid after the customer makes the bill payment. A small factoring fee is taken from this 10% based on how long the invoice is factored and the monthly volume of factored invoices. Discount rates range between 1.5% and 4% per month depending upon the above factors.
Freight factoring is better than conventional loans in more ways than one. It is easy to get it and that too in just a few days. There are certain limitations to the amount of loan you are taking, but if you consider the freight factoring option it has no such limits. As your sales grow so does your factoring amount! Thus your financing is directly related to your transportation company’s growth. If you arrange with the factoring company to collect the bills on your behalf, you are relieved of credit collection. You can use that time and money to invest more in your business. Factoring companies also regularly provide you with receivables and payment statements, which help you to streamline your business.
Most factoring companies buy the bills using non-recourse invoice factoring. Under this agreement the factoring company bears the risk of non-payment due to insolvency of your customer.
Not many banks provide factoring services. However there are many new factoring companies coming up who have professionals working with them and offer good services and competitive prices. There are many companies coming up, who advertise on the Internet also. You could check them out and make a long-term contract with a company that gives you and your customer quick and courteous service.
Freight factoring gives you the advantage of improving the cash flow and helps you to concentrate on the growth of your business. It is a very good finance option. Rather one may say that it is an extension of your business. Thus if you have a transportation company you may use the services of a factoring company and take your business to the next level.
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