"It's inevitable that after a few years of operation most independent sales organizations want to grow their businesses only to find their financing options limited. Indeed, many banks are reluctant to underwrite a loan for a small business in what is considered to be an extremely price competitive and volatile market. Nor are they likely to lend against what they consider to be an intangible asset - future revenues on merchant processing contracts..."

"Creative Financing: The brightest prospect on the horizon is the emergence of a handful of lenders focusing on making loans to ISOs.… [B]ecause these companies are actively lending to ISOs, their understanding of the processing business enabled them to put the value of a merchant contract in perspective and float a loan against future revenues. Known as debt financing, the practice enables ISOs to secure funds using their merchant contracts as collateral. In most cases, the ISO will grow its revenues at a much higher rate than the interest rate charged on the loan. "Debt financing is the best source of funding, economically and logistically, for the ISO;" explains David E. Putnam, president of Chevy Chase, Md.-based Resource Finance Company. "A lot of ISOs don't know debt financing is available…"   Resource Financing is one company [that is] actively willing to provide working capital to ISOs."

Link here for complete article in pdf format