Glossary Terms

Credit Card Receivables

Credit card receivables, also known as credit card factoring, is a type of financing available to businesses that are paid by customers with credit cards.

Credit card receivables, also known as credit card factoring, is a type of financing available to businesses that are paid by customers with credit cards.

Credit card factoring companies consider a business’ future credit card sales as an asset. They purchase a percentage of the business’ predicted future credit card sales at a discounted rate. Then, when credit card processors collect on the business’ credit card sales, a fixed percentage is transferred directly to the credit card receivables company. The advantage to the business is receiving cash for future sales upfront, rather than waiting for the credit card sales to be processed and collected upon.