Distributor Credit Solutions: A Different Approach
A new company led by some familiar names is taking a different approach to marketing the Merchant Cash Advance (MCA) product. Distributor Credit Solutions (DCS) in New York City is pitching distributors/wholesalers an alternative way of offering terms to their customers. Gone are the days of the beloved Net 30. COD is the law of the land for businesses purchasing inventory and it’s hurting both parties.
A food distributor will probably tell a new restaurant that payment on delivery is the only way they’ll make the sale. But if the restaurant doesn’t have the cash, then no tranasction happens and the distributor walks away from an opportunity.
Enter the MCA solution
The restaurant wants $10,000 in food and drink supplies. The distributor refers them to DCS as an instrument to make the payment. DCS approves the $10,000 and pays the distributor. The restaurant then diverts a small percentage of each credit/debit card sale to DCS automatically up until the $10,000 + a fixed fee has been repaid.
- Restaurant gets supplies
- Distributor gets paid cash upfront and makes the sale
- DCS handles the payment
- Repeat if necessary
The success of this approach will depend on DCS’s ability to connect with distributors. The concept is sound but the implementation is a real challenge. We believe that the proprietors of this new company are capable and it is our opinion that their unique approach is a step toward mainstream acceptance of the MCA industry. (Read ‘The Colossal Marketing Failure of the MCA Product‘)
It sure beats cold calling…
– The Merchant Cash Advance Resource
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.