Using Credit Card Merchant Machine Financing May Indicate You Need A Workout

We all know what is happening around retail stores needing additional cash flow availability and therefore using merchant credit card machines as a financing tool.

For various reasons, decreased revenues, increased overhead and higher costs are interfering with successful cash management and thus small business owners are accessing any avenue they can to create capital to support their cash flow requirements. It is frequently a matter of the businesses life or death. To serve this need, some smart people have designed another form of financing using merchant credit card machines as a source of financing. This program, while expensive, has supported many small business owners, giving them the ability to hold on and rebuild.

I suggest, however, that if a retail store has resorted to credit card machine financing this may be a strong indicator that the business needs a debt workout to significantly reduce the debt service requirements that are challenging cash flow. In fact, given the significant expense associated with merchant credit card financing, it’s possible that doing a debt workout would eliminate the need for expensive financing, further enhancing the potential success of the business.

While merchant machine credit card financing serves a valuable and important purpose, it is not resolving the underlying cash flow issues. Cash flow issues require action to resolve. While financing is important, it is additional debt and it is additional borrowing. Debt workouts help resolve cash flow issues by eliminating unaffordable debt.

If you are involved in merchant machine card financing, consider the need for a debt workout.