Small businesses often ignore using credit card processing solutions to produce business financing improvements. Business owners now recognize credit card processing help as a major component in working capital management improvements, especially in light of cash flow fluctuations and economic volatility for businesses almost everywhere. One of the potential benefits is reducing outlays for one of the highest variable expenses with a business accepting credit cards. It will often be possible to obtain additional working capital that can be used for payment of other business expenses even though credit card processing costs cannot be reduced.

Merchant financing programs are among the short-term financing options related to recent credit card processing volume. This business finance option is also referred to as a working capital advance, business cash advance and credit card financing. 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. Merchant financing can exhibit several (avoidable) problems if not executed properly, but the strategy has proven to be an effective commercial financing approach to obtain operating cash quickly for small businesses. In other words, not all business cash advance programs are the same, and in some cases there are major differences.

Evaluating the possibility of refinancing SBA loans 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. A small business owner may be able to obtain working capital financing that is sufficient to make refinancing unnecessary if they have enough credit card processing transactions. An additional advantage of obtaining short-term working capital financing instead of refinancing a long-term commercial loan is the shorter time frame required to obtain cash (usually one to two weeks).

Some working capital management programs will make the replacement of the current credit card processor appropriate in order to produce immediate cash flow and realize the maximum cost reduction possible. As just noted, however, there are several alternative business financing options which will result in more working capital for a business without impacting the current credit card processing arrangement.