| Credit Card Loans Explained |
Many
companies already have bank lines, pledged their assets, and even
used their owner's homes as collateral. Now, they can leverage
one more asset to increase working capital: future credit card
sales. This is a relatively new concept. It was introduced about
ten years ago to provide funding for restaurants. Although there
have been many success stories, the product has often been viewed
as a method of last resort because of the high cost and short
payback period.
Resource Option has taken this concept, leveraging
future credit card sales, and applied long standing asset based
lending principals. In this way, we are able to provide larger
loans, to more credit worthy clients. This is a modern innovation
in working capital. We are able to lend funds to you by using
your credit card sales as an asset.
Is it a loan, or a purchase
of assets?
Resource Option lends money; we do not purchase
your assets in advance. We can do this because our loan rates
do not violate federal banking regulations. We have the lowest
rates in the industry. Our rates are comparable to the Federal Reserve rates and the average merchant is approved in 7 business days. Loans have significant
tax advantages over cash advances. To see how much interest you
are paying on a cash advance, please use our rate analyzer
How Much Can You Get?
All programs are customized to meet individual client needs. We
typically lend up to one month of your average credit card sales.
This means that if your company has annual sales of $12 million
through Visa and MasterCard, Resource Option can advance up to
$1 million. Because we are asset based lenders, we can review
your other assets and perhaps increase the size of any loan.
How Do You Pay It Back?
You will pay back a small percentage of your credit card sales
out of your operating bank account on a daily basis. There is
no need to change processors. Alternately, Resource Option can
set up a lockbox for your company at a large national bank. The
proceeds from the lockbox will go to Resource Option and then
get sent back to your operating account. A portion of each credit
card sale will be used to repay the initial advance. You will
not have any borrowing base, coupon book, or monthly payment to
remember.
How long is the payback
period?
We typically structure our loans to get paid back anywhere from
6 months to 2 years. This will represent a small percentage of
your credit card sales.
How much does it Cost?
We charge rates that are comparable to the Federal Reserve rate. Rates are based on the term of the loan. Most importantly,
our rates are competitive with other forms of financing. Because
our rates are low, and the payback period extended, we solve your
cashflow needs with out creating new problems.
Do I have to change my processor?
We may be the only merchant advance company that permits you to
keep your processor. However, if you would like to change processors,
we have relationships with several of the largest and best processors,
who will either meet or beat your current rates and level of service.
Nevertheless, we appreciate your loyalty to existing relationships
and would like to be part of it, not replace it.
What can I use the funds
for?
You can use it for any purpose. Typically, our clients use it
to add to working capital for expansion, seasonal needs, renovation,
inventory purchases etc.
What if I already have bank
financing?
We can work with your bank lines so that this is a complement
to, not a replacement of your existing financing.
Other merchant advance companies
stress that this is not a loan. Why is that?
It might be because they don't want anyone to understand how much
they charge. There is the possibility that their high rates violate
federal banking regulations concerning loans. Classifying an advance
as a “purchase of assets” avoids potential legal issues
regarding usury laws. It has been our opinion that if you receive
money and expect to pay it back, plus some additional cost, within
a period of time, then it does not matter what you call it; it
is a loan.
Are there any tax advantages?
Yes there are tax advantages to taking out a business loan. We
recommend that each merchant speak with their accountant for specific
details.
How long does the process
take?
Our due diligence is usually completed within 24 hours. However,
because we need to coordinate with your processor and bank, the
funding usually takes between 5 and 10 business days.
Can I get additional funding
after I close with Resource Option?
Yes. Most clients qualify for additional funding after they have
paid down their original loan by 50%. Some clients use this facility
like a revolving loan.
| Why
to choose Resource Option |
Size
We provide financing for much larger businesses
than other merchant finance companies. We target companies whose
credit card revenue exceeds $2 million per year. Our loans start
at $500,000 and go up to $3 million. Most other companies reach
their top limit where we begin.
Rates
Resource Option has the lowest rates of any merchant
finance company. Our clients use us as an addition to, or perhaps
instead of, bank financing. Knowing this, our rates have to be
competitive. We invite you to use our rate analyzer to see exactly
what you are currently paying, or have been quoted by others in
the industry. We are sure that our rates are lower.
Transparent Pricing
Resource Option will explain our rates in detail.
Other finance companies may avoid this discussion. We will try
to educate you so you can make better informed decisions. Once
you see what other merchant finance companies charge, you will
thank us whether or not you become a client.
Customized Client Programs
We know that each client is different. You are in different industries,
have different financial backgrounds and have different goals.
We look at each client individually and tailor a program to meet
your needs. Upon understanding your business, we then develop
a transaction involving both an agreed upon rate and payback period.
We know that it would be impossible to fit you into a preset program.
Easy Renewals
Once your loan is paid down by 50%, you will qualify for a renewal
at your option. Unlike other programs, you only pay for the additional
funding, not for the cost of an entirely new funding. For our
clients that continually renew, this can prove to be a huge savings.
Lowest Payback Rates
Our programs extend out to two years. This is longer
than any other competitor and allows for the lowest payback rates
in the industry. Your payback period will be determined as part
of our overall customized initiatives.
No Delays or False Promises
Resource Option is structured without bureaucratic layers.
Top management is always available to discuss and understand individual
needs. Decisions are made quickly.
Asset Based Lending Approach
We view your credit card receipts as only part of
your financing solution. Because of our broad lending background
and affiliation with Entrepreneur Growth Capital (“EGC”),
we are able to review your entire financing needs and perhaps
provide additional working capital. EGC is one of the leading
asset based lenders specializing in small to mid size companies.
EGC provides loans against accounts receivable, inventory, equipment
and real estate. We look at the entire package to see how we might
be able to meet more than your credit card needs.
Experience
Most of our managers have been lending for well over 15 years.
Combined, we have over 100 years of experience. We have provided
working capital to thousands of businesses in dozens of industries.
We have been in this business longer than our competitors and
have a more lasting commitment to both the industry and our clients.
|
| Recent Transactions |
| Industry |
Funding Amount |
| Restaurant Chain |
$1,500,000 |
| Oil Distributor |
$1,200,000 |
| Restaurant Chain |
$400,000 |
| Retail Chain |
$375,000 |
| Restaurant Chain |
$350,000 |
| Retail Stores |
$300,000 |
| Health Club |
$175,000 |
| School |
$150,000 |
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