This type of cash advance provides a business with quick funding. It’s based on your business performance rather than your credit score; your daily receivables or credit card receipts are a fundamental metric for the financing decision.  Whether it’s for an emergency or other funding needs, it’s designed with lower barrier to entry.

Typically, these types of advances charge higher interest rates and come with higher than average fees. The funding company will advance you the money and allow repayment in two different ways – you’ll receive a lump sum with the stipulation that the funding institution receives a certain share of your future credit and debit card sales; or daily or weekly debits from your business checking account are done automatically at a fixed amount.

With this type of funding, you are selling a certain portion of your future revenues in exchange for quick access to capital. Think of this as a pay day loan for businesses.

Invoice factoring is very similar. Invoice factoring allows you to access your receivables without creating debt, and keeps cash flow moving for growth.