However, there are downsides to using small business credit cards.
- Credit cards require a great deal of personal management to stay abreast of changing terms, interest rates and even perks.
- Your business credit card can affect your personal credit score.
- Credit cards often have high annual fees.
- Some cards require you to pay your full balance each month to receive rewards.
- If you go over your limit or have a missed or late payment, you face high fees.
Payroll factoring, on the other hand, is a more flexible option. It does not require lengthy credit or financial reviews, and the application process is quick and easy.
With payroll factoring, you sell your accounts receivable invoices to the factor in exchange for immediate cash. Your clients then pay the factor directly.
Payroll factors are likely to overadvance because they understand the staffing industry, while with a business credit card, if you go over your limit, you’ll be penalized with high fees.
In addition, payroll factoring includes one low rate, expressed in your contract, that doesn’t change without your agreement.
For more information on payroll factoring and how it can benefit your staffing firm, visit www.tempay.com.