How do you pay back a credit card advance?

Aside from being able to fund a much larger percentage of those who apply; one of the major differences between a credit card advance and a traditional loan is in the way in you pay them back.

We all know that when you get a bank loan, we pay back a fixed amount each month until the loan is paid back. All of the interest is already added into the loan payments.

A credit card advance is very different.

In order to fund more people; they had to figure out a way to remove some of the risks associated with lending money. How they did that is what makes this type of funding so unique.

The money is advanced based upon the amount of credit card sales your business does. Once you are funded, a small percentage of your credit card sales is automatically used to pay back the advance. This is done directly through the processor each time you batch out.

Many merchants prefer this to writing a check each month. One of the reasons is because there are never any late fees if you are late or forget to make a payment.

One of the reasons that this type of funding has been so successful is that since a percentage of your daily credit card sales is used; the amount you pay back each day is directly correlated to the amount of sales you do for the day. Simply put; if sales are slow, you end up paying back less.

This flexible payback structure is one of the cornerstones of their success. It is also why they are able to fund a much higher percentage of those who apply.