Merchant Cash Advance in Canada, U.K., and Beyond!

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Our site receives many thousands of visitors a month, particularly the section on the Merchant Cash Advance industry. Our web traffic analytics show a steady flow from states all across the country but we’d be blind to ignore some of the fastest growing segments. The Merchant Cash Advance Resource’s top 6 visiting countries in order of largest to smallest is:

  1. U.S.A.
  2. Canada
  3. United Kingdom
  4. India
  5. The Philippines
  6. Australia

So why does this matter? Well, mainly because the Merchant Cash Advance(MCA) financial product is not limited to the United States. In fact, it has been widely used in Canada and the U.K. for several years.

In 2007, the explosion of the MCA industry in the U.S. had caught the attention of international bankers and hedge funds. A group of big players already dominated the market share here at home so rather than try to get in the game late, these finance honchos sought out opportunities abroad.

They have experienced much success but not without a few challenges along the way. These are a few of them:

  • Demand – Other countries do not approach borrowing with the same openness that Americans do. Although a MCA is not a loan, it is still a form of leveraging.
  • Law – Other countries have laws that impact what a MCA funder can and cannot do. While this type of transaction is recognized as a sale of future receivables in the U.S., it is a bit more complicated abroad.
  • Exchange Rate – Funding sources with U.S. backing are subject to exchange rate risk and currency stability risk. If the country experiences a huge bout of inflation, the value of the future receivables decrease. For example: If 6 months from now $13,000 has the same buying power as $10,000 does today, then purchasing $13,000 of future receivables for a price of $10,000 would merely result in a break-even transaction.
  • Recourse – In the U.S., a breach of contract is presented to a judge and defaults are handled by collection agents. Other countries govern these situations in their own manner.

Market Sizes

While it’s been challenging enough to determine the value of the U.S. Market, we found a little calculation AdvanceIt(a Canadian MCA provider) offered in 2008. “We use as an approximate size estimate that any Canadian to U.S comparison is done at 1/10.” Based on our assessment of the U.S., That would imply a $50 Million a year industry in Canada. The mathematics offered by AdvanceIt assumed the U.S. MCA market had already surpassed $1 Billion a year in 2007. Though it was hot that year, $1 Billion was an overly aggressive estimate.

If you work for a funding firm outside the U.S. and wish to share some insight on your experience or what you believe the respective country’s market size to be, e-mail us at webmaster@merchantprocessingresource.com

The Players

This is who we know of. Is your company out there? Send us an e-mail.

Canada

RapidAdvance

AdvanceIt

CanaFunding (AmeriMerchant)

Merchant Fast Cash

U.K.

Merchant Cash Express

United Kapital

Credit For Merchants

Ashley Finance

Asia

Global Merchant Funding (Mainly Hong Kong and Singapore)

Australia

AUSVance

The Facilitators

We can’t forget India and the Phillipines. Though there may not be much of a market for MCAs in these countries at present, they are frequently involved in software development, marketing, and customer service for companies around the world.

Thank you all for visiting and we intend to cover this topic again in more detail. Share your stories and information. We’re always happy to hear from you!

-The Merchant Cash Advance Resource

http://www.merchantcashadvanceresource.com

webmaster@merchantprocessingresource.com

Photos Copyrighted by 123RF.COM

Last modified: February 21, 2013
Sean Murray


Category: merchant cash advance, MPR Authored

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