I was talking with a fellow business owner?

Question

and she dropped the term 'credit card factoring.' I am not sure what this refers to. Is anyone familiar with the term credit card factoring?

Answer 1

It is a type of business loan that uses your future credit card sales as a sort of collateral.  The lender will give you a check for a certain percent of your "anticipated" credit card sales, and when those sales materialize, you pay back the lender.

I am sure you need some kind of track record and a good business plan that anticipates future sales allocated to credit cards to apply.  The interest rate you are charged is usually lower than if you just apply for a business loan.

There is one company at the link below that I just found when I googled.  I don't know anything about it and I certainly DO NOT ENDORSE it.  But you can probably get some more detailed information from that site.