Good Loan Rates

It is difficult these days to obtain a loan from a bank, let alone obtain a loan at good rates. Many times merchants are shocked at the cost of a merchant cash advance. While this type of funding is generally more expensive than a traditional bank loan, it is much easier to obtain. Furthermore it is an unsecured loan which means that there is no collateral involved. Personal credit and business credit do not generally play a role in obtaining... [Read More...]

Frustration with Documentation

Okay.  Let’s put this into perspective.  A merchant is receiving an unsecured loan, ranging anywhere from $2,000 to $250,000.  Most businesses that are funded in the merchant cash advance industry are considered high risk – if they weren’t high risk then they would be going to banks to obtain their working capital.  A merchant cash advance company is not a bank; they are private investors who are looking to invest their money on... [Read More...]

Why Does My Broker Keep Switching Numbers on Me?

While it may be a nuisance for merchants that their merchant cash advance lender changes the advanced amount on them, even after contracts are signed, they must be aware that this type of financing is not a traditional bank loan.  In the rare case that a retail or restaurant merchant actually does qualify for a traditional bank loan it takes weeks, if not months, for the funding to actually occur.  During this process the bank is constantly collecting... [Read More...]

The Deal isn’t Done, Until It Is Really Done!

Merchants, be aware!  Although contracts were signed, the funding has not been deposited into a bank account yet.  Merchant cash advance lenders still have to underwrite the file, check trade references, check landlord/mortgage references and settle all other outstanding issues (like tax liens and mortgage payment plans) if they exist. Merchant cash advance lenders can give an estimate of when the funds will be released into bank accounts, and then... [Read More...]

Home Based and Online Businesses

The difficulty in funding home based and online businesses is that the merchant is not locked into any lease or mortgage. Because a merchant cash advance is an unsecured loan i.e. there is no collateral involved and the private lender cannot take over assets if the merchant goes out of business, there is an extreme amount of risk taken on behalf of the merchant cash advance lender during this process. It is precisely for this reason that the money... [Read More...]

I was declined because of industry type

The merchant cash advance industry has evolved a lot from where it used to be five years ago. Private lenders have learned from their past mistakes and are constantly modifying their businesses practices in order to reduce their bad debt. The merchant cash advance industry has expanded to many types of businesses that typically were not eligible and now are, but many of the industries which were once easily funded are now finding it increasingly... [Read More...]

Split Funding

Split funding is the preferred method of most lenders to collect their return on investment.  When a merchant decides to go with a lender he has three different methods of paying back the advance (depending on the lender and the cash flow situation of the merchant):  Split funding, ACH and Lockbox.  For an in-depth discussion of ACH vs. Lockbox click here. The preferred method of collecting credit card receivables is through the split funding method. ... [Read More...]

How Much Interest Am I Paying on Processes Credit Cards?

What are these interest charges I see on my credit card processing report? There are two methods which a merchant processor charges interest on credit cards: 1) Three tier plus basis points 2) Interchange rates plus basis points There exist some 200 odd types of Visa/MasterCard credit cards which are issued by banks. An example of different types of Visa cards would be a Visa Gold Card compared with a Visa Rewards Card or a Frequent Flier mile Visa... [Read More...]

Broker Vs. Direct Lender

There is a misnomer in the Business Cash Advance industry about broker’s and lenders.  Direct Lenders are the “bank” so to say.  If contacted they are the actual lenders who are providing you with the majority of the funding for your business and set the rates.  They will be able to provide you with one program at a set pricing which they provide to all their merchants. As far as brokers, there are really two different types of... [Read More...]

ACH vs Lockbox

Many merchants are hesitant to change their processor for numerous reasons.  Maybe they have good rates with their current processor, a long standing relationship with them, or have multiple locations and aren’t interested in complicating things.  An ACH and a lockbox method may be available to merchants depending on the size of the advance and whether the merchant has positive cash flow. In a lockbox advance, the lender creates an additional... [Read More...]

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