Loans Secured efficiently on Credit Card Sales

One of the common Achilles heels of any emerging business is its requirement for working capital. This poses a huge burden on businesses to arrange loans from their respective banks. A major hallmark of credibility to advance any loan is the sales the business has made so far. Merchant service customers are exploring avenues to repay only when they get paid. Loan plays a crucial role, especially in the case of credit and debit cards sales. Businesses can source their advances on the basis of sales made on credit cards and avail merchant loans. In this way, instances of cash crunch or the bank account running dry can be easily avoided.

How are loans secured via credit card sales?

Any amount which is advanced to a business depends upon the average monthly credit card sales which are made by the business. In a way, a transparent metric of cost is agreed upon with no additional rates or late fees or penalties anywhere.

The loan is secured as there is no collateral in the first place. Following are the ways in which loans are secured through sales on credit cards:

1. Fast Approval: Unlike banks, the process of getting approved is simple, clean and fast. Any approval typically takes about 72 hours and funds are processed quickly.
2. The high rate of Approval: Not just fast approval, but a large number of businesses are absorbed under the secured shelter of loan, making loan on credit card sales literally creditworthy.
3. Flexibility: Repayments are virtually hassled free with no rigidity of paying on a term basis or advancing fixed payments whatsoever. There is no anxiety of failing to make any late fee payment or penalty. Thus, loans secured via credit card sales are very flexible.
4. Safety: What makes securing loans on credit card sales different from a regular bank loan is that there is no threat to any asset with the former. Gone are the times when the business had to put precious assets as collateral to fulfill the cost requirement of securing loans. Ironically, such sources did not make loans secured any longer.

In a nutshell, it can be said that the sales of a business can be used to bootstrap further growth with a secured loan mechanism, serving as a conduit to achieve the same. This is most suitable for small and medium-sized businesses having a wider scope and opportunity of growth and market share. Loans secured on the basis of credit card sales can catalyze businesses to devise cost-effective strategies to generate higher sales volume. Furthermore, loans can help finance marketing and ad campaign costs in certain cases or generally for the upkeep of additional stocks. Credit card sales relieve both the supply side and demand side of infrastructural roadblocks. On the supply side, no negative externalities are borne by the business to reach out to banks for loans. On the demand side, there is a clear record of a transaction made with the convenient use of credit cards.