How Merchant Cash Advances Work

As attention grows, providers of the loan alternative are trying to avoid regulators' scrutiny. Here's what you should know about the industry.

Receivables finance booms amid the bust

Companies running tight budgets often find themselves at the mercy of clients' slow repayment schedules. Receivables finance, a little-known but increasingly popular service, allows liquidity-starved businesses to sell their invoices at a discount in return for cash.

Ship Today and Get Paid Tomorrow

Many companies know that accounts receivable factoring can help keep a company's cash flow going, while fewer business owners have heard about single invoice factoring, or spot factoring, a highly effective alternative. It is basically a discounting service that is simpler and superior to standard invoice factoring, receivable financing, receivable funding or assets based lending. Customers can sell credit-worthy invoices to IFG, and get immediate working capital, in essence enabling them to ship today and get paid tomorrow. The program allows choices of invoices to be factored, enabling them to retain most of their money, while spending the minimum fees to guarantee adequate cash flow.

Get your money!

If you think the client will pay eventually but you really need the cash now, consider going to a factoring company, says Mari. This type of firm buys unpaid invoices, usually at a 1% to 5% fee, and gives you the cash up front.

Businesses Go to Source Of Fast Cash

Bank loans have been harder to come by, but that doesn't mean companies' need for funding has dried up. To get cash, small and medium-size businesses have increasingly turned to firms that get them money they are owed more quickly.