An Alternative Route to Capital for Small Businesses

by | Apr 1, 2013 | Business

Operating a small business successfully and profitably in uncertain economic times is not an easy task. Many owners not only lose their businesses, but go into debt during a financial crisis that may end in bankruptcy and take years from which to recover. Banks becomes less more aggressive and less likely to take risks, which means getting a loan from a conventional bank can be extremely difficult if not impossible.

Many people who would perhaps benefit in a less strenuous economy from Small Business Financing through a traditional bank find themselves taking desperate actions to try to save their businesses, whether that means getting a home equity loan or even drawing from retirement assets. The proverbial saying about robbing Peter to pay Paul applies here: risking your home or your retirement funds in order to save a sinking business may keep the company afloat for a while, but then you will have to worry about whether you will be able to pay off the loan in a timely manner without losing the equity in your house, which you have put up as collateral. Likewise, cashing in on a 401K or IRA fund before maturity means absorbing a significant financial loss as well as paying huge tax penalties.

An alternative route for small business financing lies in using the services of companies that offer cash advances or capital to qualifying small businesses based on the profitability of future credit card transactions. This method for accessing needed capital is known as a merchant cash advance, and does not rely upon home equity or personal savings  or other assets as collateral. In most cases, small business financing can be obtained through a merchant cash advance for businesses that have poor credit, as long as other qualifying factors are met. The lump sum of the initial advance payment itself is given based upon an agreement made with the business or merchant that a certain percentage of future credit card or debit card sales will be paid to the provider.

For many businesses that do not qualify for bank loans, this is a great solution to help keep the business operating, and provides the capital to make changes that improve profitability. Whenever there is a credit card or debit card sale (in most cases), a percentage of the profit is automatically paid to the processor or provider until the amount is eventually repaid. Because of this, merchant cash advances are not legally or technically regarded as loans, but rather as the sale of future card transactions.

PayPointUSA provides business cash advances, Small Business Financing, and new business loans, providing working capital within three business days or less. PayPointUSA offers alternative financing to advance cash to you today based off future credit card sales. For more information, visit PayPointUSA online at or call toll-free 1.888.767.2757.

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