Woman using a credit card

Are Credit Cards the Best Way to Finance your Business?

The Dangerous Allure of Credit Card Financing

Many entrepreneurs start their business with a little bit of personal savings, some friends and family money, and a couple of credit cards.  Credit cards are relatively easy to obtain and easier to use.  So, it’s not surprising that business owners rely on them for daily expenses.

A Better Alternative to Gain Needed Funding

Traditional financing options such as bank loans are only available to profitable companies with at least a three-year history.  Another option to entrepreneurs that is often overlooked is account receivable financing, also known as invoice factoring. Invoice factoring allows the business owner to access capital trapped in their accounts receivable.  Instead of waiting 30, 60, or 90 days for customers to pay their invoices, business owners can get cash for their invoices.

The main advantage accounts receivable factoring has over credit card financing is that the business owner is not creating more debt.  And if the business owner has good customers, the factoring company will grow with your company.    Entrepreneurs that rely on personal credit cards to finance their business often must take out additional cards because of extra expenses and slow paying customers.  This hurts the owner’s FICO score and can leave them with a big pile of debt.

Invoice factoring offers a smarter solution for staffing companies, manufacturers, distributors, fabrication and service companies.  At American Receivable Corporation we have helped business owners protect their personal credit scores while providing the capital to grow their business.  Our 42-year history is of helping entrepreneurs create successful and thriving companies.  Call us at 1-800-297-6652 to get started today.


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