You have been looking for a set of chairs for your office conference and meeting room and finally found eight that are the exact color and style you want. The office furniture company does handle some financing but you have just enough room to put them on your credit card.
First, if you have one credit card with a $5,000 or $10,000 limit, this purchase might bring you within 10% of your credit limit, putting these chairs on your card could lower your credit score. One of the main factors in the credit score formula is how much of your available credit you have used. If it is more than 33% you get a ding.
Also, what is the interest rate you would be paying? You have plans to pay this off within six months, but you still have to factor in the APR for six months.
So now you are thinking about letting the office furniture company finance the purchase. More than likely, their APR will be 21% or more. This really is not a good idea.
What you need is a small business cash advance. Unlike going to your bank and filling out reams of paper, many cash advance companies have on-line applications that are easy to complete. You do not have to be a lawyer to figure them out. A merchant cash advance lender will consider more than a raw credit score in the decision making process. You are an individual and not an account number.
If your small business accepts credit cards for some payments you have another resource for funds. These so-called “alternative lenders” will advance you the funds you need and rather than have a monthly payment obligation, they can take a small percentage of your monthly credit card activity as a payment plan.
There has been a good deal of talk in the news lately about retailers charging more for charge card purchases than for cash sales. Most businesses that accept credit cards have worked the rates into their cost of doing business. But the rates continue to climb because the banks want to make up for the fees they are no longer able to charge their customers. Visa and MasterCard publish their interchange rates on the Internet for all to see. Anything a company is charged over and above the interchange rate and association fee goes to the credit card processor. They can add on percentage points, charges for customer service, charges for sending a statement – you name it.
When you secure a small business cash advance, the money can be in your checking account in as little as five days. Sites like Biz2Credit.com can help you get the best terms.
Now you can go to the office furniture store and try to negotiate a better price. Begin with 10%. Tell the store you plan to pay with cash (business check) and you would like a 10% discount on your purchase price. All they can say is no. If they want your business badly enough, you will get a great discount on your chairs, keep your credit rating in tack, and have payments on a small business cash advance that are totally manageable.
This article was submitted by Mary Branca, she has a Bachelors of Journalism from the University of Georgia and spent 20 years in marketing management with national companies in the Southeast, Northeast and Midwest. She has combined her marketing experience with her passion for writing.