While being your own boss and owning your own company has many advantages and benefits, there are many challenges that you face as a small business owner. One of those challenges invloves meeting the cash requirements of operating your business. Getting the money to start your business was challenging enough, getting additional cash once your business has been started can prove to be even more difficult. Banks are more than willing to greet you with open arms when it comes to providing you with a business checking account and other services that they can charge fees for, but quickly change their tune when it comes to making a loan to help your small business. Even if the bank does agree to loan your business money, they often require you to pledge not only business assets but personal assets, such as your house, for collateral. It is safe to say that most small business owners have complete faith in their business concept but any number of uncontrollable factors could have a negative impact on business and sales. It is also safe to say that most small business owners count on their small business as their sole means of income. If sales were to drop off and a business could not keep up with their loan payments, then the business owner faces losing his/her business to the bank or, even worse, losing their home and other personal assets to the bank.

However, there are alternatives for the small business owner to get the working capital that they need for their business outside of traditional capital sources, such as banks. One of these alternatives is for the business owner to use the future credit card sales of their business to meet their current cash flow requirements. With this type of funding solution, a business agrees to sell a portion of it's anticipated future credit card sales at a discount. In turn, they submit a percentage of their daily credit card sales until the agreed upon future sales amount has been satisified. Here's how the program works:

- The company purchasing the future credit card sales of the business will review 4 to 6
months of credit card processing statements to determine the average monthly credit
card sales of the business.
- Based upon this average, the company purchasing the future credit card sales will make
an offer to purchase the anticipated future sales at a discount. Typically, the offer will be
for 1 to 2 months of the average sales and it usually takes about 6 to 10 months for the
agreed upon future sales to be collected.
- The future sales due to the company that purchased them is retrieved by capturing a
fixed percentage of the daily credit card sales of the business when the business
batches their credit card sales for the day.

Among the advantages of this type of funding solution are:

- It is not a loan. So there is no debt load that is put on the books and no impact on credit
scores.
- Since it is not a loan, there is no colleratal required or pleding of personal assets.
- The business recives the cash it needs quickly. Typically, from application to approval to
funding takes less than 10 business days.
- There is no set time frame for repayment.
- There is no fixed payment amount. A fixed percentage of daily sales is retrieved, not a
fixed dollar amount. Therefore, payment amount is directly related to sales. When sales
are up the $ payback for the day is up. When your sales are down, the $ payback for the
day is down.
- Payback is automated. The $ due for the day based on the withholding percentage is
automatically retrieved from the day's credit card batch. There is no need to keep up
with due dates or worry about late charges.
- Approval criteria is much more than liberal than the approval crieria for getting bank
loan. While the approval criteria is very liberal, it does not mean that just because a
business accepts credit cards that it will be approved. There is an application process
that a business must go through. However, funding decisions are made within 24 hours
of an application being submitted.

There are many types of businesses that this type of funding solution will work for. Among those business types are:

- Restaurants
- Nightclubs & Bars
- Retailers
- Salons & Spas
- Automotive Service Centers
- Hotels/Motels

Eligibilty requirements for businesses to receive this type of funding will vary from company to company. Typically, the requirements are going to be as follows:

- In business at 12 months
- Accept credit cards as a form of payment from their customers
- Provide at least 4 months of credit card processing statements
- Not in bankruptcy and be at 12 months discharged from previous bankruptcies
- If there are liens, they do not total more than $100,000

Owning your own business is very rewarding but there are challenges. Among those challenges is being able to get access to the capital you need to sustain and grow your business. Historically, banks have been the main source of obtaining additional capital. However, banks are often unwilling to lend money to the small business or require the small business owner to pledge personal assets in order to secure financing. Now, there are alternative solutions available for the small business owner to get the capital that they need for their business. Among those solutions is for the small business owner to leverage their future sales by selling a portion of their anticipated future credit card sales to get the cash their business needs.

I have been an active participant in your forum for a while but never noticed your post. I never heard of the strategy you discussed it looks like an interesting solution for a lot of people. Thanks.

I agree but it would only apply to stable and mature businesses that are the ones who usually do not need the loans

Ya too bad we could not use this practice on start ups we would all do it. I think it is a great idea if you are only planning on doing it temporarily but depending on the discount they pay you which I am sure is in the double digits, it is a slippery slope.