Compare These Top Vendors for Credit Card Receivables

Credit card receivable financing is an alternative method of securing working capital. When you use this type of funding, you are selling a portion of your future sales, determined by credit card receivable factoring, to a provider. The benefit is that people who can't get traditional financing can get this type of funding. The downside is that it costs more than traditional methods of infusing cash.

With this type of financing, often called a merchant cash advance, you won't need to jump through the hoops to prove your credit worthiness. Because credit card receivable financing is not viewed as a loan, the cost for the funds varies drastically. When you consider credit card receivables pricing and costs, you will want to look at the following components:

1. Find credit card receivable financing services from companies that don't charge an application fee.

2. Determine what the financing charges, sometimes called origination fees, will be before signing paperwork.

3. Evaluate the receivable percentage and shop around for the best rate.

Look for companies that offer credit card receivable financing with no application fee

When it comes to credit card receivables pricing and costs, you want to consider any application or upfront fees. Most legitimate companies will not charge you anything up front, but when a company does charge, the fees vary based on the company's policy. Some companies use a set fee, but others charge a percentage of the advanced amount as the application fee.

Find out the origination fee for funding credit card receivables

Providers of credit card receivable funds make money by charging an origination fee, sometimes referred to as finance charges. The amount for this fee will vary depending on your business situation and the risk involved for the company to provide you with the funds.

Know the receivable rate for credit card receivable financing

An interest rate is a term that only applies to a loan, so many providers will use the term receivable rate to identify the percentage of your sales that the provider will take to repay the advance. This is a prominent part of pricing and costs for this type of funding. Most sources site a receivable rate of 26 to 30 percent of your sales. In some cases, a provider may include its financing charges in the percentage.