Short-Term Commercial Loans and Business Cash Advances
By: Stephen Bush
This article will describe alternatives such as short-term business cash advances and commercial mortgages. With an economic recession impacting business activity adversely, all working capital financing options should be considered. Business borrowers should not overlook short-term choices for commercial loans.
Short-term commercial loan alternatives are frequently forgotten because of misunderstandings about long-term commercial financing. Although long-term commercial real estate financing options are often appropriate, there are practical short-term business financing choices that will be more workable and profitable for commercial borrowers.
The most critical short-term commercial financing techniques typically include short-term merchant cash advance and credit card processing programs and commercial real estate loan programs. Both working capital funding approaches are frequently a source of confusion for business owners.
An underutilized commercial financing strategy for businesses is possibly the best commercial loan strategy to secure cash for their business: a business cash advance using credit card processing. Credit card financing is an effective business financing tool that is usually overlooked by any business accepting credit cards as a customer payment method.
The most likely candidates to benefit from this working capital loan strategy are retail stores, service businesses, restaurants and bars. To obtain business cash advances based upon sales volume, this funding strategy uses an under-utilized business asset (credit card receivables). This working capital cash strategy is also known as credit card factoring. Many businesses have relied upon receivables factoring or receivables financing which allows them to sell their future receivables at a discount.
Not all service and retail businesses can document business receivables to obtain a commercial loan. Businesses such as bars and restaurants do not typically have receivables to use for business financing. What these businesses do have in many cases is documented sales activity. This credit card sales activity becomes a financial asset to the business and its working capital management funding. Business cash advances from $5,000 to $300,000 can usually be obtained based on a merchant's sales volume and future sales.
The commercial financing repayment requirement for working capital advances is normally under 12 months. The arrangement can be renewed for merchants that need the business cash advance program for a longer time.
There will usually be only a few business financing sources that are regularly successful at executing the credit card financing and processing. There are key difficulties to avoid with a working capital advance, and selecting an effective funding source is essential to an appropriate business cash advance program.
A long-term commercial mortgage is appropriate for many businesses that own commercial property. Commercial property should be financed with an appropriate combination of short-term and long-term funding. It is wise to consider long-term business financing of up to 30 years when a longer-term commercial real estate loan is feasible.
Learn how to avoid problems with working capital loans and obtain candid business cash advance advice - Stephen Bush is a small business cash management expert => AEX Commercial Loans and Commercial Mortgage Loans [ http://aexcfg.com ]
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