Would an APR Help?

Merchant cash advance industry hater Ami Kassar added to his collection of rants today in the Wall Street Journal by writing about the True Costs of Cash-Advance Loans.

Bloomberg BusinessWeek writer Pat Clark, knowing full well that Kassar and I have sparred online, tweeted:

curious what @financeguy74 thinks RT @akassar: The true cost of cash advance loans: my latest @wsj column http://t.co/BjyqMgM8Uz

— Patrick Clark (@pat_clark) May 14, 2014

My response:

Do I think merchant cash advances when structured as loans should include a prominently displayed APR on the contract?: Yes, though I believe this is less helpful than the dollar for dollar cost explanations that are already presented. But in the name of maximum transparency, it would be a good thing to have on there.

Do I think less business owners would use such loans if the APR was prominently displayed?: No

If DealStruck can make their model work, then great. What I want to know is, what happens to the businesses they won’t approve?

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.