How to Start a Merchant Cash Advance Company
Originally published: 4/11/2011
One of our readers e-mailed us this question:
I would like to open a MCA company. What do I need and where do I apply ? Do I need permit, license or what? Where can I get the help and info?
– From: J.H.
Are you looking to be the actual funding provider or a broker?
If you’re looking to be the provider, you should spend some time brokering the deals first. You need to get your feet wet and get the hang of what the business is all about. You will not the have the security that a bank has, such as collateral or a fixed payment schedule.
A summary of basic terminology and processes: https://debanked.com/apps/wiki/merchant-cash-advance-wiki
Here’s what other companies require and analyze: https://debanked.com/application%20process.pdf
You need to ensure that your contracts, agreements, applications, and marketing materials are consistent with the transaction being a purchase of future sales, not a loan.
Additionally, you don’t need to start a funding company from scratch. There are Merchant Cash Advance funding networks such as Colonial Funding Network that can provide everything you need, including systems, underwriting, and even a portion of the capital itself. You make the deal, they service the account.
We hope that helps.
– The Merchant Cash Advance ResourceLast modified: November 25, 2019
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.