A tool designed to estimate the cost and terms of funding received through a sale of future credit and debit card sales receivables offers businesses a quick way to project potential expenses associated with this type of financing. For example, a business owner can input the amount of funding sought, estimated future card sales, and the provider’s factor rate to determine the total repayment amount and estimated daily or weekly remittance.
This form of financial planning is crucial for small and medium-sized enterprises considering this funding option. It empowers business owners to make informed decisions by providing a clear picture of the total cost of capital, enabling comparisons across different providers and alternative financing options. Historically, assessing these costs involved complex manual calculations. Such tools simplify the process, increasing transparency and accessibility to short-term funding information.
