« Older Entries

Credit Card Processing – Everything You Need to Know

Credit card processing is a vital part of any business that wants to accept credit cards as a form of payment.

mediaimage
Credit card processing is a vital part of any business that wants to accept credit cards as a form of payment. Whether you run a brick-and-mortar store or an online business, you’ll need to find a reliable credit card processing solution that will work for you. In this article, we’ll give you an overview of what credit card processing is and how it works, as well as some tips on finding the right solution for your business.

What is Credit Card Processing?

Credit card processing is the process of accepting credit cards as a form of payment for goods or services. This can be done either through a physical point-of-sale (POS) system or online. Credit card processing solutions typically include a merchant account, credit card reader, and payment gateway.

In order to process credit cards, businesses will need to apply for and be approved for a merchant account. This is a type of bank account that allows businesses to accept credit card payments. Once you have a merchant account, you’ll need to set up a credit card reader. This can be either a physical device that’s attached to your POS system or a virtual terminal that allows you to process payments online. Finally, you’ll need a payment gateway. This is a software that connects your merchant account to your payment processor, which is the company that actually processes the credit card payments.

How Does Credit Card Processing Work?
When a customer makes a purchase with a credit card, the credit card processor will authorize the transaction and send the funds to your merchant account. This usually takes a few days. Once the funds are in your account, you can then transfer them to your business bank account.

There are typically three parties involved in a credit card transaction: the merchant, the customer, and the credit card processor. The merchant is the business that’s selling the goods or services. The customer is the person who’s using their credit card to pay for the purchase. And the credit card processor is the company that’s responsible for processing the credit card payment.

When a customer makes a purchase, the merchant will send the credit card information to the credit card processor. The processor will then either approve or decline the transaction. If the transaction is approved, the processor will send the funds to the merchant’s account. This usually takes a few days. Once the funds are in the merchant’s account, they can then transfer them to their business bank account.

Tips for Choosing a Credit Card Processor
There are a few things you’ll want to keep in mind when you’re looking for a credit card processor. First, you’ll want to make sure that the processor can handle the volume of transactions you expect to process. You’ll also want to make sure that they have a good reputation and are known for providing good customer service. Finally, you’ll want to compare the fees charged by different processors to make sure you’re getting the best deal.

When you’re looking for a credit card processor, it’s important to compare the fees charged by different processors. You’ll want to find a processor that charges a flat fee per transaction, rather than a percentage of the total sale. You’ll also want to make sure that the processor doesn’t charge any hidden credit card processing fees.

It’s also important to make sure that the credit card processor you choose can handle the volume of transactions you expect to process. If you’re a small business, you might not need a processor that can handle a lot of transactions. But if you’re a larger business, you’ll want to make sure that the processor can handle your transaction volume.

Finally, you’ll want to make sure that the credit card processor you choose has a good reputation. You can check out online reviews to see what other businesses have to say about the processor you’re considering.

The Bottom Line
Credit card processing is essential for any business that accepts credit cards. When you’re choosing a credit card processor, there are a few things you’ll want to keep in mind, including fees, transaction volume, and customer service. By keeping these factors in mind, you can be sure to find a credit card processor that’s right for your business.

Tags:

Self-Storage Loan: How It Works

As a business, self-storage real estate is not for everyone. However, the need for commercial mortgages, construction loans, cash-out leveraging, refinancing loan vehicles, CMBS, bridge lending, mezzanine financing, preferred equity, and real estate private equity for private investors, small/middle market real estate entities, and family offices who are into it generates a lot of activity for us.

mediaimage
As a business, self-storage real estate is not for everyone. However, the need for commercial mortgages, construction loans, cash-out leveraging, refinancing loan vehicles, CMBS, bridge lending, mezzanine financing, preferred equity, and real estate private equity for private investors, small/middle market real estate entities, and family offices who are into it generates a lot of activity for us.

You’ll need money whether you want to develop, buy, expand, or repair a self-storage facility.

Fortunately, self-storage is and has always been, an industry with strong fundamentals and consistent development. For nearly 30 years, the self-storage market has earned 3.5 percent annual returns, according to the New York Times.

Many lenders are interested in funding self-storage developments as a result of these encouraging results. Business loan lenders, on the other hand, are not all the same. To properly finance your project, you must first understand your storage loan alternatives and how self-storage financing works.

Self-Storage Loan Options
Self-storage loans are available through SBA lenders, credit unions, and banks, as well as alternative lenders. You’ll learn about the financing options available from these three types of lenders in the sections below.

SBA Loans
The SBA offers self-storage financing through its SBA 7 (a) and 504 loan programs. The structure of SBA 7 (a) and SBA 504 loans for self-storage financing is the same as it is for any other permitted use.

The SBA partially guarantees the loan, which is made by a financial institution. Because of this partial guarantee, lenders can make SBA loans to applicants who would otherwise be ineligible. However, because of the low-interest rates on SBA loans, the application procedure is quite competitive.

Purchase property, extend or repair an existing self-storage facility, or restructure existing debt using an SBA 7(a) or 504 loan.

Credit Union and/or Bank Loans
A credit union or bank can help you fund self-storage projects with a line of credit, a regular loan, or a construction loan.

It’s worth mentioning, however, that many credit lines have limit amounts ranging from $100,000 to $250,000. Depending on the scope of your self-storage project, you may require a higher sum to fund it.

In addition, a company line of credit is typically used for short-term financial requirements. The majority of credit lines have terms of seven years or less. That means you’ll have to pay off your line of credit promptly, which some borrowers may not be able to do. This will, of course, be less of an issue if your self-storage project is tiny.

Credit union or bank business loans are substantially more suited for larger self-storage projects. According to Federal Reserve data, the average small company loan amount is $663,000, with loan amounts ranging from $13,000 to $1.2 million.

Self-storage construction loans are used to fund the building of self-storage facilities. To qualify, you’ll typically need a 25% down payment and a loan term that matches the length of the building project. You’ll owe a balloon payment for the remaining around the time the building job is completed.

Most borrowers have permanent financing lined up before their construction loan term finishes, thanks to the balloon payment.

Tags:

Understanding the Impact of the Prime Rate on Your Finances

The prime rate is a critical financial benchmark that not only influences the interest rates on loans and credit products but also reflects the overall health of the economy. This article delves into the intricacies of the prime rate, its recent trends, and the profound effect it has on individual borrowers and the broader economic landscape. By understanding the prime rate, you can make more informed decisions about borrowing, saving, and managing your credit.

What is the Prime Rate?
The prime rate, often referred to as the prime lending rate, is the interest rate that commercial banks charge their most creditworthy customers, typically large corporations. This rate is primarily influenced by the federal funds rate, which is set by the Federal Reserve and is the rate at which banks lend to each other overnight. The prime rate is usually about 3 percentage points higher than the federal funds rate. For instance, if the federal funds rate is 1%, the prime rate would typically be around 4%.

The prime rate serves as a benchmark for various types of loans, including mortgages, personal loans, and credit cards. While individuals with excellent credit scores may receive rates close to the prime rate, most consumers will see rates that are several percentage points higher, depending on their creditworthiness.

The Prime Rate’s Influence on Loan Interest Rates
The prime rate directly affects the interest rates that consumers pay on their loans. When the prime rate is low, borrowing costs are generally lower, making it cheaper for consumers to take out loans for homes, cars, and other major purchases. Conversely, when the prime rate rises, so do the interest rates on loans, making borrowing more expensive.

Creditors use the prime rate as a starting point to set their own interest rates. They consider factors such as a borrower’s credit score, income, and the loan’s repayment term to determine the final rate offered. Therefore, even if you don’t qualify for the prime rate, its fluctuations still impact the rates you’ll encounter in the market.

Monitoring and Improving Your Credit Score
Maintaining a good credit score is essential for securing favorable loan terms. You can monitor and improve your credit score using credit repair software or by engaging the services of a credit repair company. While credit repair services can be costly, especially for those with significant credit issues, credit repair software offers a more affordable solution. It allows you to access your credit reports, identify errors, and generate dispute letters to challenge inaccuracies with credit bureaus.

The Prime Rate History Over the Last 5 Years
The prime rate can change multiple times within a year or remain steady, depending on economic conditions. Here’s a brief overview of its fluctuations over the past five years:

Prime Rate Changes in 2017
March: Increased to 4%, the first time since 2008
June: Rose to 4.25%
December: Climbed to 4.50%
Prime Rate Changes in 2018
March: Increased to 4.75%
June: Reached 5%
September: Went up to 5.25%
December: Ended the year at 5.50%
Prime Rate Changes in 2019

August: Decreased to 5.25%
October: Further reduced to 4.75%
Prime Rate Changes in 2020
March 04: Dropped to 4.25%
March 17: Plummeted to 3.25% due to the economic impact of the COVID-19 pandemic
Prime Rate Changes in 2021
Remained at 3.25% throughout the year
Prime Rate Changes in 2022

March: Increased to 3.50%
May: Rose to 4%
June: Climbed to 4.75%
July: Reached 5.50%
What Triggers the Prime Rate to Fluctuate?
The prime rate is closely tied to the federal funds rate, which is influenced by the Federal Reserve’s monetary policy. The Fed adjusts the federal funds rate to manage economic growth and control inflation. When the Fed raises the federal funds rate, the prime rate typically follows suit, leading to higher borrowing costs. Conversely, when the Fed lowers the federal funds rate, the prime rate usually decreases, making loans more affordable.

How Does the Prime Rate Affect You?
The prime rate’s impact on the economy is significant. Lower prime rates can stimulate economic growth by making it more affordable for businesses to borrow and expand, potentially leading to lower prices for consumers. For individuals, the prime rate affects the cost of borrowing for various purposes, from buying a home to financing education.

Before taking out a loan, it’s wise to check the current prime rate to gauge potential interest rates. If the prime rate is high, you might consider delaying non-essential loans in anticipation of a rate decrease.

Can Future Prime Rates Affect Your Current Loans?
Whether future changes in the prime rate will affect your current loans depends on the type of interest rate you have. If you have a variable interest rate loan, your interest rate will fluctuate with changes in the prime rate. Fixed-rate loans, however, are not affected by future prime rate changes.

Paying off loans quickly can help you avoid the risk of rising interest rates and the negative impact on your credit score that can result from missed payments. A strong credit score is crucial for securing the best interest rates on loans, so it’s important to keep your credit in good standing.

If you’re struggling with a poor credit score, consider using credit repair software like Credit Money Machine Web to monitor your credit, detect report errors, and file disputes with credit bureaus. For more information or to see the software in action, you can reserve a live presentation or call (954) 568-7153 for inquiries.

Tags: