Take one small business owner, one or more small businesses and multiple credit card sales. Add in fast, renewable cash, mix well, and you’ve got a credit card advance.

As you may have deducted from its names, a credit card advance is a cash advance of a business’s future credit card sales for a business owner. In other words, a credit card advance allows a small a business owner to sell his/her business’s future credit card sales to a credit card advance lender at a discount.

Credit card advances were invented to give small business owners an alternative option to traditional business loans from banks. In the past, small business owners who had excellent credit scores, impeccable personal financial histories and had owned their businesses for years were able to receive business loans from banks.

Getting a bank business loan usually consisted of completing an extensive loan request, gathering and presenting numerous documents and preparing a presentation, outlining plans for the money received via the bank business loan.

But just like the world wouldn’t be the diverse and exciting place it is if it weren’t for the great mixture of shapes, sizes and colors, all small business owners do not come from one cookie-cutter mold. Some business owners have great credit while others have average to poor credit scores. Some have owned their businesses for a very long period of time while others are in the beginning stages of their entrepreneurial journeys. Sometimes a business owner has time to wait to receive funds for his/her small business and other times, business emergencies call for fast cash.

For the business owner who does not have excellent credit, has not owned his/her business for years and/or needs fast cash, the bank can not offer sufficient assistance. The credit card advance is a more convenient method of business financing for these types of small business owners.

History and Development

In the mid 1990s there were only a few credit card advance lenders serving merchants. Since then, many credit card advance lenders have emerged giving small business owners more options for business financing and making it much easier for them to secure business funds.

The emergence of so many credit card advance lenders has both pros and cons. On the upside, competition in the industry has caused certain lenders to increase the quality of their services, lower their rates and offer various incentives to borrowers such as rewards points, redeemable for airline miles and the opportunities for small business owners to receive funds in 24 to 48 hours after renewal.

Still, with so many credit card advance lenders available, it may be difficult for small business owners to distinguish the legitimate lenders who offer reasonable requirements and have the business owners’ best interests in mind from those that are simply interested in making a dime and will say and do anything to get a customer.

One way to determine which lenders put merchants first is by visiting the Better Business Bureau’s website and looking up a company’s profile.

Over the years, credit card advance providers have seen an increase in the number of merchants seeking their services. This may be due to the fact that time has allowed more and more people to become aware of their existence. Today’s economic situation also has a lot to do with the increase. As fewer and fewer small business owners qualify to receive traditional bank loans, more and more small business owners are turning to credit card advances to finance their businesses.

Qualifications and the Process

Owners of retail and service-oriented businesses that process daily credit card sales are eligible to receive credit card advances. Requirements may vary slightly from lender to lender but the basics remain the same. The typical credit card advance candidate has owned his/her merchant business for at least four to six months and processes a minimum of $5,000 in monthly credit card sales.

Once a business owner applies for a business cash advance, he/she can usually have funds wired into his/her account within ten business days after approval. The funds can also be used without restrictions.

All of these factors make the credit card advance an excellent way for small business owners to receive funds for their businesses. As the economy changes and small business grows, credit card advances may increase in prominence.

Gaston C. writes articles about Credit Card Advances for Merchant Resources International.