Commercial borrowers often overlook the use of credit card processing solutions to improve business financing. Business owners now recognize credit card processing loans as a major component in working capital management improvements, especially in light of cash flow fluctuations and economic volatility for businesses almost everywhere. The potential benefits include significant cost reductions for a major business expense incurred by any business which accepts credit cards in their daily operations. Even when costs cannot be reduced, it will generally be feasible to obtain working capital that can be applied to payment of other business expenses.

Merchant financing programs are one of several business financing tools directly connected to credit card processing. This commercial finance option is also known by several other names, including credit card receivables factoring, business cash advances and working capital advances. The advance will be paid back gradually as credit card transactions are processed after a business is approved and receives an initial fixed amount of cash. A prudent business funding process will typically require two to three weeks. While this has proven to be a useful commercial financing approach for small businesses to obtain operating cash quickly, merchant financing can also result in several undesirable problems if executed improperly. In other words, not all business cash advance programs are the same, and in some cases there are major differences.

Evaluating the possibility of commercial loan refinancing as a quick source of working capital is one obvious alternative for many business owners in their search for business financing which can provide timely cash flow. While there might be good reasons to pursue such a strategy, the fees, profit and loss issues and length of time to obtain cash from refinancing business debt mean that this option is not always practical. The volume of credit card processing could permit a small business owner to obtain a working capital loan that is large enough to make refinancing unnecessary. The shorter time period required to obtain cash (two weeks or less) is an additional relevant advantage of obtaining a short-term working capital loan instead of refinancing a long-term commercial loan (which can often take two months or longer).

To realize the biggest possible cost reduction as well as produce immediate cash flow, some working capital management strategies will make the replacement of a credit card processor appropriate. For business owners pleased with the current cost structure for their credit card processing, the focus should be on one of several business financing choices which do not require a change in the existing credit card processing in order to obtain working capital.