Among the other important factors to be looked at when applying for a merchant credit card cash advance, one must consider the typical size of each transaction of their company. One might ask him or herself why this really is of any importance at all to the funding source making the advance. The solution is truly a fairly commonsensical one.
To illustrate the significance with this data, let us use two examples, both of which are seeking a merchant credit card cash advance of $20,000.
THE LOCAL DINER
The initial example will probably be that of a local diner. Let’s suppose nevertheless restaurant averages $20,000 per month in credit card sales. We have all gone to diners, so let us believe that the typical cost of dinner taken care of by credit card is $30.00. Which means in certain month, to maintain the degree of $20,000 in sales, the diner will have to serve 667 meals at the typical cost of $30.00. Achieving that quantity of turnover and sales would appear to be a serious daunting task.
THE HIGH-END FURNITURE STORE
For the purposes with this discussion, let us claim that the next business is a high-end furniture store. This store, which sells customized pieces, averages $80,000 per month in credit card sales. The furniture is sold in sets, however, so the typical cost per transaction is $8,000. As you are able to guess, which means that the store will have to make only 10 average sales to maintain its monthly average of $80,000 in credit card transaction.
WHO IS MORE LIKELY TO OBTAIN AN ADVANCE?
As we have discussed in previous posts, the advances are repaid to the funding source on a per-transaction basis. Which means the funding source will restrain a percentage of each transaction – anywhere from 8% to 25% – until the advance is repaid 정보이용료 현금화. Wise practice would seem to dictate that it will be easier for the high-end furniture store to make 10 sales than it will be for the diner to make 667. Therefore, the furniture store may be the apparently obvious answer.
But we ought to delve further to raised understand who the more qualified candidate for a merchant credit card cash advance is.
While the diner has to complete more volume, the relatively small size of the sales causes it to be impossible for anyone, two, or even fifty to materially affect the income of the restaurant. This really is not the case with the furniture store. A decrease by only 5 sales would slice the income of the store in two, affecting its power to repay the advance. Now, while funding sources understand and take into account the truth that some months are slower than others – leading to less being repaid in those months – they want to hedge around possible.
Thus, in the end, the diner is the greater candidate for a merchant credit card cash advance compared to the top end furniture store. This really is not to imply that the store will be summarily rejected for an advance, but it’d certainly become more of challenging to discover a source. So if you should be considering a merchant credit card cash advance, recognize that smaller ticket items sold in greater volume are looked upon more favorably than higher ticket items sold as in lower volume.