Information on Merchant Accounts,
Ecommerce and Credit Card Processing

August 21st, 2006 by Jamie Estep

E-Commerce Times – Factoring: There’s Money in Your Receivables

Filed in: Ecommerce, Merchant Accounts |

Factoring is discussed in this article: Factoring: There’s Money in Your Receivables from the Ecommerce Times.

A business can also factor using their merchant account. By using their credit card processing history, a business can take out an advance backed by their business’s processing volume and history. This works just like the factoring in this article but the lender is basing their funding from a business’s history instead of their accounts receivable.

Business can get cash very quickly, and without strict credit requirements since business history is what a lender is basing the advance from. Factoring from a merchant account will put money paid in processing fees toward paying off the advance, which can also make it much easier to repay.

Many small businesses get stretched thin on their available credit, so factoring against their sales can be a great way to get extra funding, fairly quickly.

What should the money be used for:
Since any money advanced through factoring is backed specifically by the sales of the business, it is important that the money advanced goes back into the business. Whether this be a remodel, increased marketing efforts, opening a new location, or anything else, the money advanced should always go back into the business.

If you are interested in factoring against your sales through your merchant account you can talk to your current provider to see if they offer this service, or contact me. We have several factoring options available for our customers.

Also, don’t confuse this type of lending with the type of merchant account fraud: credit card / merchant account factoring.

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