Betting on the Future With Merchant Cash Advance

November 14, 2012 | By: Sean Murray

An excerpt of the article in ISO&Agent’s November/December 2012 Issue:

“The business of merchant cash advances is changing, and ISOs are finding they need to do the same to keep up.

Long considered a niche product ISOs could rely on to add value to a contract, today’s cash advance market is highly competitive and heavily saturated. The situation creates a tradeoff for ISOs. On one hand, more merchants are aware of cash advance, which means there’s more demand for it. At the same time, more financial services providers are offering it, and that means greater competition.

With credit card companies offering cash advance and alternative lending, it can be tougher for ISOs to build loyalty among the merchants who receive them, ISOs and merchant cash advance providers say. ISOs might also have to overcome the negative reputation merchant cash advance has in some circles.

ISOs should rethink their strategies and stay on top of merchants when it comes to cash advance, says Sean Murray, CEO of Raharney Capital, a New York consulting firm that caters to merchant cash advance companies. “You know the saying, ‘Always be closing?’ Well, you should always be offering merchant cash advance,” he says.

It’s not uncommon for an agent to offer a merchant cash advance in January, then come back to try again in March only to find that 10 other ISOs hit up the merchant in February, Murray says. “You can’t just throw it in there casually every few months. Everyone is marketing cash advance,” he says.

But opportunities arise…”