I own a small business with about 12k in credit cards sales monthly. Is it safe or wise to borrow against that

I have been approached by a few companies that will lend my business money against the business monthly credit card sales, which is about 12k dollars in monthly sales. Is this legit or safe?
In General Area - Asked by Juan P. - May 25, 2010
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Gary S.
Broker/Agent
Texarkana, TX

It may be legit, but I would recommend against it. It is called Factoring / pledging receivables and the firm will discount the value of your invoice. If you really need more consistant cash flow, apply for a small operating loan at your bank. They may also offer some type of Factoring themselves.

May 26, 2010
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Nehal and Rupen S.
Researcher
Iselin, NJ

A better method is to consider various other avenues of creative financing available without borrowing against your credit card sales. Lending against credit card sales is not a bad way to borrow, however it is limited to your sales and in your case you will get less than $100,000.

May 27, 2010
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