Definitions

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Credit Card Receivable Funding

Credit card receivable funding is a method of obtaining business capital also known as a Merchant Cash Advance. It involves the sale of a specified amount of a business' future credit card sales at a discount, and a collection process that is automatically handled by the business' credit card processor. Credit card receivable funding is obtained through an external capital source such as a Merchant Cash Advance provider, and is an asset sale and not a loan.

Qualified businesses may turn to credit card receivable funding when capital is needed urgently for a variety of projects or scenarios. Credit card receivable funding can be used to help your business pay down existing debt, pay for expansion or growth projects, or to purchase equipment. Different providers will have different restrictions and details that govern their credit card receivable funding transactions.

Credit card receivable funding is often a good alternative to leases, loans, or other ways of raising working capital when seeking business capital for use in a variety of ways. Traditional financing has strict eligibility and usage requirements that often make it difficult, if not impossible, for some businesses to access the capital needed for their activities. Credit card receivable funding providers will instead usually put more focus on the sales strength of the business itself and focus less on the credit strength of the owner of the business. This makes credit card receivable funding particularly attractive to business owners who might have some credit challenges, or those who don't want to use personal assets to secure business capital.

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