Among the other important factors to be considered when applying for a merchant charge card cash advance, one must consider the common size of each transaction of his or her company. One might ask him or herself why this really is of any importance at all to the funding source making the advance. The solution is really a fairly commonsensical one.
To illustrate the significance of the data, let us use two examples, both which are seeking a merchant charge card cash advance of $20,000.
THE LOCAL DINER
The initial example will probably be that of a local diner. Let’s suppose that said restaurant averages $20,000 monthly in charge card sales. We have all visited diners, so let us believe that the common cost of meals taken care of by charge card is $30.00. This means that in confirmed month, to maintain the amount of $20,000 in sales, the diner would need to serve 667 meals at the common cost of $30.00. Achieving that amount of turnover and sales would be seemingly a serious daunting task.
THE HIGH-END FURNITURE STORE
For the purposes of the discussion, let us say that the 2nd business is just a high-end furniture store. This store, which sells tailor made pieces, averages $80,000 monthly in charge card sales 구글결제 현금화. The furniture is sold in sets, however, so the common cost per transaction is $8,000. As you can guess, which means that the store would need to make only 10 average sales to maintain its monthly average of $80,000 in charge card transaction.
WHO IS MORE LIKELY TO OBTAIN AN ADVANCE?
As we’ve discussed in previous posts, the advances are repaid to the funding source on a per-transaction basis. This means that the funding source will keep back a percentage of each transaction – anywhere from 8% to 25% – before advance is repaid. Wise practice would appear to dictate so it will be easier for the high-end furniture store to make 10 sales than it will be for the diner to make 667. Therefore, the furniture store may be the apparently obvious answer.
But we should delve further to better understand who the more qualified candidate for a merchant charge card cash advance is.
As the diner has to complete more volume, the relatively small size of the sales helps it be impossible for any one, two, or even fifty to materially affect the income of the restaurant. This is false with the furniture store. A decrease by only 5 sales would slice the income of the store in two, affecting its power to repay the advance. Now, while funding sources understand and account fully for the truth that some months are slower than others – resulting in less being repaid in those months – they prefer to hedge as much as possible.
Thus, ultimately, the diner is the greater candidate for a merchant charge card cash advance compared to the top quality furniture store. This is not to imply that the store will be summarily rejected for an advance, but it’d certainly be more of difficult to find a source. So if you’re considering a merchant charge card cash advance, realize that smaller ticket items sold in greater volume are looked upon more favorably than higher ticket items sold as in lower volume.