Stop the Debt Settlement People, Funders Come Up With Merchant-Friendly Alternative

April 3, 2024
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green ledgerAre debt settlement “advisors” interfering with your contracts and putting your merchants in a bad spot? The industry is now taking the reins on a solution. It’s called GreenLedger, a platform for funders to work together on resolving a merchant’s situation with no debt settlement middlemen encouraging an intentional default, taking fees, and making false promises.

Founded by Elevate Funding CEO Heather Francis, who aims to eventually make it a non-profit, merchants would go to this industry-collaborative platform, indicate who they have open contracts with, and the platform would notify the funders directly.

“From there, the primary points of contact at each funder can get together to come up with a more specific and comprehensive payment plan that works with the merchant’s needs,” said Francis. “GreenLedger’s mission is to work directly with our small business clients to stabilize their revenue-based financing arrangements and avoid breaching their agreements, eliminating the need for potentially predatory middlemen.”

The platform has already been generating interest.

“As an attorney deeply committed to the financial empowerment of small and medium-sized businesses, I am thrilled to endorse Elevate Funding’s creation of GreenLedger,” said industry attorney Patrick Siegfried. “This initiative represents a pivotal step in our ongoing battle against the increasing prevalence of unscrupulous entities in the commercial finance debt settlement industry. Far too often, these bad actors employ deceptive sales tactics and bind clients with unfair contracts, leading not to the promised debt relief but to further financial strain for small businesses. GreenLedger, with its dedication to transparency and integrity, stands as a true avenue for business owners seeking legitimate and effective financial solutions. Its mission to root out malpractices and safeguard the interests of small businesses is not just commendable but essential in today’s challenging economic landscape.”

To learn how you can participate and cut the debt settlement people out of the picture, attend this webinar on April 16th.

How Merchant Cash Advance Companies Can Avoid Problems This Tax Season

April 2, 2024
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David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email

taxesIn the fast-paced and ever changing world of cash advance, tax season can often present a labyrinth of compliance and reporting challenges. These challenges are not just bureaucratic hurdles that must be overcome; they also serve as crucial tests of a company’s financial health and operational integrity. Given the intense scrutiny the cash advance industry faces from regulatory bodies, particularly in light of recent industry shaking events, alongside the unique nature of how its financial transactions can be structured, ensuring tax compliance is not just advisable—it’s essential. Let’s discuss frequent speed bumps cash advance companies encounter during tax season, and some solutions for these problems.

Misclassification of Income and Advances

One of the most significant stumbling blocks for cash advance businesses lies in the misclassification of the funds they advance to customers. This misstep can lead to serious tax implications, distorting the financial understanding of a company in the eyes of the law. A robust accounting system that accurately differentiates loans, advances, and income is not just a recommendation; it’s a necessity. Each category must be meticulously reported for tax purposes, a task that underscores the importance of seeking guidance from a tax professional well-versed in the nuances and implications of these classifications.

Misreporting Income

A common oversight among cash advance companies is the inaccurate reporting of income. Whether it’s underreporting or misclassifying earnings, the repercussions can be severe, and include the possibility of triggering an audit or incurring a severe financial penalty. The remedy? An accounting software tailored for the funding industry (such as Orgmeter, MCA-Track, OnyxIQ, Centrex, or LendSaas), capable of automating the calculation and reporting all necessary metrics and income. This ensures not only compliance but also a transparent overview of a company’s financial health that benefits you as well.

State-Specific Tax Obligations

Just over 5 years ago, Wayfair was successfully sued by South Dakota for failing to tax online sales even though they had no physical presence in the state, beginning a new era of legal understanding of state tax obligations in the internet and cross-state trade era.The complexity of tax compliance is magnified for cash advance companies operating across state lines, each with its unique tax laws and regulations. This multi-state maze can easily lead to oversight or misunderstanding, risking non-compliance. The solution is twofold: developing a comprehensive compliance checklist for each state and consulting with tax professionals who specialize in navigating these multi-state operations. Together, these strategies form a bulwark against the many possible blind spots of state-specific tax obligations.

Documentation for Audits

Not having the correct documentation and record-keeping on hand can transform a routine tax audit into a nightmare scenario, and cause businesses to be slapped with heavy penalties and fines. To counter this risk, cash advance companies need to maintain meticulous records of all transactions. Experts often recommend businesses conduct regular audits, whether internal or external, to ensure these records are both accurate and will back you up when they are needed.

Planning for Tax Liabilities

Perhaps one of the easiest mistakes to avoid is not adequately planning for surprise tax liabilities. Without planning in advance and setting aside sufficient funds to cover these obligations, companies can find themselves in a precarious cash flow situation when taxes are due. A proactive strategy to counter that involves specifically marking off a portion of income in a dedicated account for unforeseen expenditures (tax liabilities included), calculated with an estimated effective tax rate. This approach, developed with the assistance of a tax professional, can prevent the unwelcome surprise of a hefty tax bill when you’re not ready for it.

At the end of the day, tax compliance, while definitely not fun, should not be viewed (just) as a regulatory pain-in-the-butt, but as a way to ensure a cash advance business’s success and longevity. By embracing proactive tax planning and compliance, companies can not only successfully navigate the complexities of tax season but also reinforce the integrity and sustainability of their business and ensure their success and viability for years to come, free from any stress or government microscope.

On Long Island? You Might See Signs

March 26, 2024
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broker fair 2024

Billboards for Broker Fair 2024 have gone up across several Long Island towns this past week, including locations in Glen Cove, Syosset, Westbury, Bay Shore, and Valley Stream. The conference, built specifically around a broad range of commercial finance brokers, will take place on May 20 in New York City. Long Island is among the largest geographical employers of brokers in the United States.

Broker Fair attendees can expect to learn from industry pro Peter Ribeiro, meet a wide range of funders/lenders & vendors, pitch their deals, and find out what they need to be doing to remain compliant and become successful.

Broker Fair 2024 will take place at the Metropolitan Pavilion in New York City. Brokers pay the lowest price for entry. There is also a pre-show party the night before on May 19th at a Lounge called Somewhere Nowhere NYC (yes that’s really the name!).

If you’re a broker, Broker Fair 2024 is an event you cannot miss!


bay shore long island

A Broker Fair billboard in Bay Shore, Long Island

What Big Publicly Traded Companies Say About Merchant Cash Advances

March 13, 2024
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deBanked examined the public messaging from some of the largest publicly traded merchant cash advance facilitators in the US and this is what it found:


A merchant cash advance is a purchase of your future sales, also known as receivables. If your application for funding is accepted, then Shopify provides you a lump sum of money for a fixed fee. Under the Shopify capital agreement, this lump sum is known as the amount advanced, and the total to remit is the amount advanced plus the fixed fee. In return, you pay Shopify Capital a percentage of your daily sales until Shopify receives the total to remit. The percentage of your daily sales that you must remit to Shopify is known as the remittance rate. The amount advanced and the remittance rate depend on your risk profile.

For example, Shopify Capital might advance you 5,000 USD for 5,650 USD paid from your store’s future sales, with a remittance rate of 10%. The 5,000 USD amount that you receive is transferred to your business bank account specified in your admin, and Shopify Capital receives 10% of your store’s gross daily sales until the full 5,650 USD total to remit has been remitted. You have the option, at any time, to remit any outstanding balance in a single lump sum.

There is no deadline for remitting the total to Shopify Capital. The daily remittance amount in USD is determined by your store’s daily sales, because the remittance rate is a percentage of your store’s daily sales. The remittance amount is automatically debited from your business bank account.


DoorDash Capital is a cash advance, not a loan. With a cash advance, the offer is based on your sales and account history, and includes a simple, transparent one-time fee that you’ll know before you decide to accept the offer. A loan operates using interest, which can compound over time, and often includes other fees in addition to the stated interest rate.

doordash capital




A [merchant cash advance is a] non-revolving sum of funding with flexible payment, no personal collateral required and no late fees. With flexible payment, no personal collateral required and no late fees, a merchant cash advance provides sellers funding to help run and grow their business. Unlike interest-bearing loans, the advance ties payment to a portion of a seller’s future sales for a fixed capital fee, there are no additional fees or interest charged.


Fixed withdrawals from a bank account
Merchant cash advance companies can also withdraw funds directly from your business bank account. In this case, fixed repayments are made daily or weekly from your account regardless of how much you earn in sales, and the fixed repayment amount is determined based on an estimate of your monthly revenue.


A merchant cash advance is not a loan, but rather a type of financing that business owners pay back with a percentage of their future sales.

Cash (Basis) is King

March 1, 2024
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David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies. To connect with David or schedule a call about working with Better Accounting Solutions, email

taxesTax season is upon us, and it’s the worst.

Aside from wading through scores of financial documents and dealing with a million questions, it’s a fact that our government is purposely opaque in how it accounts for the tax dollars they take from business owners, and simply don’t know what it’s like to actually have a job that doesn’t involve overegulating others. On top of that, the merchant cash advance space is a difficult one to define and operate in for its different categories of advances and investors. As a result of all this, tax season can be complicated and difficult.

It’s for this reason that Better Accounting Solutions services many cash advance businesses- so let me explain what we do and why to make it easier for our clients, and-hopefully- easier for you as well.

Loans are easy to account for: there is simply the principal amount and interest. By contrast, cash advances involve the purchase of future receivables with different metrics, durations and structures for how it is paid.

Because of this, Better Accounting Solutions are big proponents of the cash basis accounting method (if a business makes less than $10 million in actual annual revenue): only recognizing the income when it is received, instead of when the transactions are made but before any money is actually seen.

To explain the concept, consider this example we’ve used before:

A merchant cash advance provider funds a merchant with $100,000 at a commission expense of 12% and a Closing Fee income of 10%. The bank fee income and RTR/Factor Rate is .5, while the merchant will pay back $150,000, $1,500 daily assuming a 100 day duration.

In terms of handling the books, we’d recommend recognizing the commission expense and closing fee income immediately (in most scenarios) on the day the advance is given, deducted from the funded amount.

But with the factor income, no additional income would be recognized until the full contract funded amount of $100,000 is received in the funder’s bank account (not just the amount wired). Once the contract amount is fully received on a cash basis, any payments received after that point constitute factor income or RTR income.

We recommend recognizing income and filing this way because, simply by reporting on a cash basis, you are deferring the recognized tax income.

This means that for all the deals in the process of being paid by the time the financial year is over do not need to be recognized for tax purposes until the next year when the full amount is back in your account, thereby deferring your tax liabilities.This means you have more time to spend that money and grow your actual business, which is obviously the reason we all do what we do.

When done simply, without over bureaucratic machinations, and with professional assistance, taxes don’t have to be a painful and difficult experience, and can even be a boon to your cash flow when done right. Make 2024 the year you show Uncle Sam you know your way around the tax system, no matter what they throw at you.

It’s essential to emphasize that this article is for informational purposes only and should not be construed as personal accounting or financial advice. It’s strongly recommended for funders and companies to seek guidance from qualified accountants or financial professionals to ensure compliance with accounting standards and tax regulations tailored to their specific circumstances.

Shopify Capital Renewal Rate Greater than 70%

February 13, 2024
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Shopify Capital’s funding business is continuing to gain momentum, according to the company’s latest quarterly earnings. Shopify stopped specifying precisely how much it is originating (perhaps because deBanked kept turning those numbers into posts every quarter for years) but still lists the receivables from its loans and merchant cash advances as a line item on its balance sheet. There the balance increased from $580M to $816 year-over-year.

“We know the capital product has been effective because we’re seeing a repeat renewal rate of over 70%, a testament to our ability to help merchants access the funding they need for growth, particularly ahead of key sale times, including the crucial Q4 holiday shopping season,” said Shopify President Harley Finkelstein during the call.

Amazon’s On-Balance-Sheet Business Loan Program Steady

February 11, 2024
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amazon truckAmazon’s business loan program was relatively steady in Q4 if its seller lending receivables are any indication. Those receivables totaled $1.3B, which was in line with where it has been throughout 2023. Compared to Amazon’s overall business, which generated $170 billion in sales in Q4 alone, its in-house lending business is rarely if at all mentioned.

Part of this is because Amazon has forged ties with third parties to service large swaths of its sellers. These parties include Parafin, Lendistry, and more recently SellersFi.

“Amazon is committed to providing our sellers with flexible and convenient access to capital, regardless of their size,” said Tai Koottatep, director and general manager, Amazon WW B2B Payments & Lending as part of the SellersFi announcement last month. “Through this lending option with SellersFi, we’re able to strengthen that commitment and offer sellers even more opportunities to grow their business.”

“Working with the Amazon Lending team has been an exceptional experience for SellersFi,” said Leonardo Felisberto, Head of Global Business Development and Partnerships at SellersFi during that same announcement. “Their dedication to empowering sellers aligns perfectly with our mission, and together, we’ve unlocked more possibilities for e-commerce entrepreneurs. We’re hopeful this can be another step toward supporting the growth aspirations of online sellers in the US and beyond.”

Lightspeed’s Merchant Cash Advance Business is Accelerating

February 8, 2024
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lightspeed commerce“Our capital business has grown—it’s doubled from over a year ago and we expect that trajectory to continue. And capital revenue comes in at a 95% gross margin,” said Lightspeed CFO Asha Bakshani in the company’s most recent quarterly earnings call.

Although Lightspeed is more widely known as a global e-commerce platform, analysts have been encouraging the company to ramp up its merchant cash advance business because of the considerable margins it produces. As such Lightspeed through Lightspeed Capital has been doing just that. And not just in the US. “We launched Lightspeed Capital in France, the Netherlands and Belgium this quarter, and Germany shortly after the quarter, expanding our global footprint for this high-margin offering,” said company CEO Jean Paul Chauvet.

Origination growth has been slow, however, because the company has been concerned with the potential impact it will have on its own available operating cash. This fear seems slightly overblown as Lightspeed reported having $750M in cash as of the close of the most recent quarter and said that merchant cash advance originations were responsible for using up only $8.3M in cash during the quarter.