merchant cash advance leads

Lead Generators Facing Rougher Road

October 13, 2017
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This story appeared in deBanked’s Sept/Oct 2017 magazine issue. To receive copies in print, SUBSCRIBE FREE

Lead generators for alternative funders are facing stronger headwinds these days. The business has gotten tougher for a whole host of reasons. A pullback in alternative lending necessitates fewer leads. On top of that, funders, ISOs and brokers have gotten pickier about the types of leads they’ll accept. What’s more, stricter application of the Telephone Consumer Protection Act (TCPA) is hampering lead generators’ ability to solicit business owners. As a result, some lead generators have faded away, while others have been developing additional business lines or are broadening their reach to other areas within financial services to buoy earnings.

“I don’t see any growth in the space for the next six months, or maybe a year,” says Michael O’Hare, chief executive of Blindbid, a lead generation company in Colorado Springs, Colorado. “It’s really unclear right now what’s going to happen, but we’ll see.”

The alternative funding industry has been in somewhat of a funk since spring 2016 when Lending Club grabbed headlines with a scandal that spooked the industry and also took out several senior managers, including the company’s then-CEO.

It was the first time in the industry’s relatively short history that people realized “it wasn’t all puppy dogs and ice cream,” says Justin Benton, a partner at Lenders Marketing in Santa Monica, Calif., a lead generator in the alternative funding space.

Since that time, there’s been a lot of movement in the market, including companies that are consolidating or exiting the business, pumping the brakes or making shifts in product lines, Benton says. These developments have all had a big impact on the sheer number of clients that are looking for leads, he says.

Late last year, for instance, CAN Capital Inc. stopped funding for several months, though it’s back in business as of early July. This summer, Bizfi, one of the stalwarts of the alternative financing space, began giving pink slips to staff and in August the company sold the servicing rights to its $250 million loan portfolio to rival Credibly.

There aren’t as many start-up ISOs or companies entering the alternative funding space—meaning more leads for existing funders—which, of course, is a boon for them.

“There are still roughly 75,000 business owners every week who meet the criteria for an [MCA]. Now instead of there being 5,000 options in the space, there are 2,000, so those 2,000 are gobbling it all up,” Benton says.

TCPAAt the same time, however, TCPA regulations have gotten more stringent, making it dangerous to solicit businesses, says O’Hare of Blindbid. “Any phone call you make, you can get sued,” he says.

Large funding companies generally take TCPA very seriously—especially if they’ve gotten hit with violations, O’Hare says. Smaller funders and brokers, however, aren’t always as familiar with the restrictions; they think it’s only an issue if you’re calling consumers, as opposed to calling businesses, but that’s not the case. “A lot of businesses today are using their cell phone as a main business line and also for personal use. If you call a cell phone that’s on the DNC [Do Not Call Registry], you can potentially get sued.”

Last year, he had a situation where a plaintiff pretended to be an interested business. When he passed along the referral, the plaintiff’s attorney claimed TCPA violations and ultimately sued the funder. The funder balked, and it created numerous issues for his company.

“THEY KNOW, THEY’VE HEARD, THEY’VE BEEN PITCHED. THERE’S NOT TOO MANY UNTURNED BUSINESS OWNERS. IT’S ABOUT GETTING THEM AT THE RIGHT TIME”


His company now tries to educate funders about how to protect themselves from TCPA litigation. He sends out emails to funders with information about TCPA and provides contact information of attorneys who are well-versed in TCPA rules. He also provides funders with risk mitigation tactics and shares his list of known TCPA litigators so funders won’t accidentally call them. He also provides direction to clients that receive a demand letter or complaint on how to respond and offers a list of TCPA defense attorneys, if they need.

“We’ve become almost extreme in how we try to avoid problems related to TCPA,” O’Hare says.

To be sure, some of the changes lead generators are experiencing are indicative of a maturing industry.

A few years ago, lead generators could be less selective who they approached initially because the concept of alternative funding was so new to merchants, says Bob Squiers, chief executive of Meridian Leads, a lead generator in Deerfield Beach, Fla. Now, however, the cat is out of the bag, and, with business owners getting multiple calls a day, it’s harder to get their attention, he says.

“They know, they’ve heard, they’ve been pitched. There’s not too many unturned business owners. It’s about getting them at the right time.”

As a result, lead generation today requires more data to discern the good leads from the bad. Instead of going after half a million restaurants, lead generators are targeting the 20 percent that data suggests are the most viable funding candidates. “It’s more of a sniper approach than a shotgun approach,” Squiers says.

Rob Buchanan, senior sales executive at Infogroup in Papillion, Nebraska, who focuses on lead-generation for the fintech space, notes that within the past 18 months or so, clients have been going after “low-hanging fruit” when it comes to leads. They are looking for leads where business owners are actively looking for financing as opposed to relying primarily on UCC data. They are still using UCC data, but to a lesser extent than they were in the past, he says.

Not only do clients want very targeted and specific types of companies—but they are changing their minds more frequently about the types of businesses they’re looking for, says Matthew Martin, managing director and principal at Silver Bullet Marketing, a lead-generating and marketing company in Danbury, Conn. They might ask for businesses of a particular size or credit quality—they are even seeking to exclude businesses within certain zip codes. They are also more amenable to leads from industries they deemed too risky a few years ago.

“I have clients that are constantly changing the parameters of what they want,” Martin says.

The problem is that once you start narrowing the leads of possible merchants that can be funded, lead costs go up and many funders don’t want to pay for that, says O’Hare of Blindbid. “The glory days when everything was wide open and you could generate leads really cheaply are pretty much gone.”

Meanwhile, as some lead generators have faded into the sunset, others are forging ahead in search of new opportunities.

“IT’S MORE OF A SNIPER APPROACH THAN A SHOTGUN APPROACH”


Benton of Lenders Marketing, for instance, says his company has started to focus its efforts in other areas of lending, including SBA, new business, mortgage, commercial, residential, auto and student loans.

Digital marketing is another area experiencing increased demand. Business owners that need money tend to use Google to find funding companies. Infogroup’s digital marketing leads these businesses directly to funders, ISOs and brokers, Buchanan says.

“More and more funders, brokers and ISOs are leaning toward doing digital marketing,” he says.

Having Problems With Leads? Don’t Feel Alone

April 24, 2016
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down in the dumps

This story appeared in deBanked’s Mar/Apr 2016 magazine issue. To receive copies in print, SUBSCRIBE FREE

Having problems with leads? Don’t feel alone. Funders and lead providers say response rates to offline marketing have been cut in half while the price of pay-per-click campaigns has skyrocketed. They blame intense competition in an increasingly crowded field of funders, market saturation by lead generation companies, better email spam filters and comparison shopping by small-business owners who are becoming more savvy about how much they need to pay for merchant cash advances and loans.

Clicks that cost $5 each seven years ago now command a price of nearly $125, says Isaac Stern, CEO of Yellowstone Capital LLC, Green Capital and Fundry. “Pay-per-click marketing has gotten out of control,” he laments. “So you need a hefty, hefty budget to compete in that world.” He reports spending $600,000 to $700,000 a month on internet marketing, compared to $100,000 monthly on direct mail.

Even when the price of individual clicks isn’t measured in hundreds of dollars, the cost of the multiple clicks required to create a lead can mount up, according to Michael O’Hare, CEO of Blindbid, a Colorado Springs, Colo.- based provider of leads. If it takes 15 clicks that cost $25 each to obtain a lead, that comes to $375, he notes. Still, some companies manage to use key words that cost $8 or so per click to get decent leads for less than $100, he says.

While the cost of pay per click is exploding, the response to direct mail marketing is declining precipitously, says Bob Squiers, who owns the Deerfield, Fla.-based Meridian Leads. The percentage of small-business owners who respond to advertising they receive in the mail has fallen from 2 percent just a few years ago to 1 percent now, partly because they receive so many mailings from so many more lead-generation companies, he says. “There weren’t too many people doing direct mail into this space five years ago,” he notes. His company’s leads range in price from pennies to $60, he says.

While Blindbid and Meridian both specialize in finding leads by sending out direct mail pieces and then qualifying the respondents in phone conversations, one of their competitors, Lenders Marketing, takes a different approach, according to Justin Benton, sales director for the Camarillo, Calif.-based company. Benton’s data-driven method combines his company’s databases with the databases of financial institutions. He cultivates relationships with the banking industry’s executives to facilitate that process, he says, and his company does not make phone calls to qualify leads.

But placing too high a value on data gives rise to two problems, the way O’Hare views the search for leads. First, analyzing the data creates plenty of challenges, he says. Second, human beings just aren’t rational enough in their decision-making to fit data-driven profiles or cohorts, he maintains. “The holy grail is to find some algorithm that will predict that a merchant needs funding, and they can then find these people through massive data,” he says with skepticism.

Whatever path a company takes to finding and verifying leads, it pays to establish three elements before classifying them, O’Hare says. First, prospects should qualify financially for credit or advances. Second, prospects should demonstrate a genuine interest in obtaining funding, as opposed to less-than-serious “tire kicking.” With both of those characteristics in place, O’Hare informs prospects they can expect to hear from funders.

Blindbid also wants to guide the expectations of the funders who are calling the leads, O’Hare says. To that end, the vendor invites funders to listen to recordings of the phone calls it makes to qualify leads. Just the same, funders should bear in mind that they may not receive the same reception when they contact the lead, he cautions. “We see it all the time, he says. “We speak to the merchant in the morning and they’re pleasant. Then in the afternoon when they speak to the funder or the broker, the merchant is grumpy.”

Retailers’ mood swings aside, funders can soon gauge the quality of the leads they’re buying. “You can’t judge a lead on cost, Squiers admonishes. “Judge them by performance.” However, performance fluctuates according to the funder’s sales skills, product offering and product knowledge, he maintains.

struggling saleswomanMeanwhile, the problems plaguing the lead business should prompt funders to become creative in their approach to finding prospects. That’s why even vendors who make their living selling leads encourage funders to search for prospects on their own. “We always advise generating your own leads,” says Benton. “The only leads you can truly count on are the ones you generate yourself.”

Knowing where to look for leads can require a thorough grasp of what’s happening in a particular market. “You can look at what industries are hot,” O’hare suggests. The trucking business is heating up, for example, because so many truckers need funding to buy expensive equipment to meet new requirements for electronic logs, he says. Meanwhile, the recession has wracked the martial arts industry, so dojos might require funding for marketing to help them recover, he notes.

Understanding every industry in that much detail isn’t practical, so lead generation companies urge funders to specialize in just a few niches. Building a network of customers who know each other can result in referrals, Benton observes. It also soothes skeptical prospects, he notes. “Once you say I’ve worked with Fred down at Tony Roma’s – they can feel more comfortable, especially if you’ve done it in the same city,” he maintains.

Whether leads arise internally or come from a vendor, funders have to work them properly to succeed in closing deals, lead-generating companies agree. “The real key is being consistent and persistent,” Benton says. “Research has shown the average lead is called 1.3 times, so once you make that second call you are ahead of the curve.” He advocates that funders use their CRM system by taking copious notes on their calls, setting up nurture campaigns and following up with leads in an organized manner.

And don’t forget that at least some prospects are getting pummeled with calls. “A lot of brokers are carpet bombing – they’re on the phone all day,” says O’Hare. “I talked to one guy who said he makes 400 or 500 calls a day on a manual dial. I’d like to do a video of that.

This article is from deBanked’s Mar/Apr 2016 magazine issue. To receive copies in print, SUBSCRIBE FREE

Some deBanked Swag to Go With Your Magazine

August 24, 2015
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Some lucky funders and ISOs will receive a Dunkin’ Donuts gift card along with their deBanked magazine shipment thanks to Lenders Marketing, a trigger lead company specializing in merchant cash advance and business loan leads. The gift cards are in limited supply and recipients are being selected at random.

Lenders Marketing deBanked Swag

A similar swag lottery took place with deBanked’s May/June issue where dozens of recipients received a Starbucks gift card with their magazines. Those were also courtesy of Lenders Marketing.

And in related news, pictured below in the green Lenders Marketing hat is professional golfer Michael McCabe during the PGA Tour Barracuda Championship in Reno, Nevada. Behind him to his left in the white hat with sunglasses is Justin Benton of Lenders Marketing.

lenders marketing golf

Why Your Deal Got Stolen

September 16, 2014
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trigger leadsBack in April, I presented the idea of trigger leads coming to the alternative lending industry. In subsequent discussions about that blog post, many folks particularly in merchant cash advance questioned whether such a concept could possibly exist or would even be legal.

For those not familiar, this is the methodology behind trigger leads using a hypothetical scenario:

  • OnDeck runs the personal credit of a merchant using Experian.
  • Experian sells the contact information of that merchant to OnDeck’s competitors immediately after credit is pulled.
  • Competitors solicit that merchant and convince them to go with them instead.

Again, the reaction I get to the above scenario by most people is, “yeah, right. I don’t believe that could happen.” But if you look at the raw amount of ISOs complaining their deals got stolen, it’s evident that perhaps there is something else brewing than just the usual assortment of rogue underwriters and shady funders.

Most ISOs are convinced that if their client is working with them and only them, that a shady business dealing has taken place if that client is randomly called out of the blue with the knowledge that they’re pursuing funding. To them, the only conclusion is that their deal got backdoored.

my deal got stolenAnd while backdooring does seem to happen out there from time to time, another culprit may very well be trigger leads. Credit bureaus and big data aggregators are selling credit pull data in real time. UCC-1 leads are leads after the funding has taken place. Trigger leads are leads before the funding has taken place. But do they really exist?

Elsewhere in alternative lending, trigger leads are the backbone for how companies tailor their direct mail campaigns. If a consumer’s credit was pulled today by a mortgage lender, companies like Lending Club and Prosper will make sure that consumer receives a mail ad for a home improvement loan tomorrow.

Today at the Apex Lending Exchange conference in New York City, Ron Suber, the president of Prosper, referred to this trigger methodology as “getting to the right borrowers at the right cost.” In their sector, trigger leads are marketing 101. In merchant cash advance, it’s perceived as a pipe dream. Odds are that whoever is taking advantage of trigger leads in this industry would want to keep all the other players in the dark about it.

As much as you might hate to believe it, all of the backdooring paranoia that’s been rampant lately might actually be caused by the credit bureaus, not the funders. The lesson here is that as soon as your merchant’s credit is pulled, the clock is ticking until your competitors find out even if that merchant talks to nobody else.

I know ISOs want to believe that their merchant is only theirs, but in the age of advanced technology and big data, your merchant belongs to the cloud. As soon as your relationship with the merchant interacts with technology, somebody else will find out about it. And that’s why your deal got stolen.

trust no one

Google Penguin 2.1 Takes Swing at Merchant Cash Advance Industry

October 5, 2013
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google penguin 2.1If you noticed a shuffle in search rankings for industry keywords last night, it’s because Google unleashed Penguin 2.1.

Penguin focuses on spammy or purchased backlinks so if you did one or the other, you probably got harmed. Given the high cost of traditional marketing and Pay-Per-Click Internet Marketing, many funders, ISOs, and lead generators have turned to SEO to boost their visibility in organic search. Whether undertaken by inside employees or outside contractors to do the job, there is no doubt that building links has been part of the strategy. Some have had major success in rising up through Google’s search results but most haven’t. It’s not easy getting to page 1, but if you get there, don’t celebrate. You won’t be there forever.

Less than two weeks ago on DailyFunder, someone took to the board to pat themselves on the back for ranking #2 for the keyword: merchant cash advance. Wikipedia is #1. They admitted it took a lot of hard work over the course of 8 months. Last night they were thrust back to position #65. That’s on page 7 where they will never be found. 8 months of work for 2 weeks of ranking. You might be saying, “Well my SEO guy will just roll with the punches and get us right back.” Unfortunately with Penguin, it doesn’t work that way. Penguin is basically a permanent penalty, an algorithmic barricade to prevent you from ever ranking for your keywords again. According to a poll on Search Engine Roundtable, only 7% of respondents claimed to have made a full recovery after Penguin 2.0. Most SEOs would advise that you torch your domain, buy a new one and start a whole new website. That’s not exactly an easy thing for a big brand or company to do.

There’s a flaw in all the SEO being done in the merchant cash advance industry anyway and that’s the notion of being on page 1 to begin with. If you read David Amerland’s Google Semantic Search, he explains that “there is no longer a first page of Google”. The results you see on the first page of Google depend completely on whether or not you’re using a desktop or mobile device, what zip code you’re accessing the internet from, what you’ve searched for in the past, and whether you’re logged into your gmail account. And if you use Google+, then forget it! The first page results for someone that uses Google+ are ultra personalized. To rank on their first page, they’ll pretty much need to follow you socially first.

So if you’re thinking about ranking higher in search as a means to generate more leads, you sure as heck better understand how the results work these days. What you see on your screen is not what I see on mine. A site that’s #65 for me, may be #4 for you.

The other angle of Google’s foray into Semantic Search is their desire to be an answer engine, not a search engine. Google wants to answer questions for searchers without them having to click a link. Here’s an example of Merchant Processing Resource acting in that role:

voice authorization

What is voice authorization you ask? Boom! Answered! No need to click anything. That’s where search is going. What this means for companies that are trying to get customers is that they either need to become the absolute authority within their industry or they need to throw in the towel and do Pay-Per-Click.

When I search for merchant cash advance from my desktop in NYC, 7 out of the top 10 results are not company pages, which is astounding considering how much effort companies are putting in to rank high for this keyword. I see:

  • 1 Wikipedia
  • 4 News articles
  • 1 Press release
  • 1 Youtube video

Did you get hit by Penguin 2.1? Are you optimized for Semantic Search?

Previous merchant cash advance SEO articles:

Merchant Cash Advance Contract Language

July 24, 2013
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contractsBelow is a look back at some of the contract language used in the industry.

2009 First Funds Contract

Purchaser agrees to purchase from Seller and the Seller agrees to sell to Purchaser, in consideration of the purchase price specified below (the “Purchase Price”), Seller’s interest in the percentage specified below (the “Specified Percentage”) of each of its future credit card receivables (the “Future Receivables”) due to Seller from the credit card processor identified below (“Processor”) until the amount specified below (the “Specified Amount”) of Future Receivables has been collected by Purchaser according to the additional terms and conditions set forth in this Purchase and Sale Agreement (“Agreement”).

The undersigned principal(s) of Seller (such principals, whether shareholders, partners or other owners are referred to herein as the “Guarantor’) hereby unconditionally, jointly and severally, guarantee Seller’s performance and satisfaction of all the covenants, representations and warranties set forth in Section 3 of the Agreement. This guarantee is continuing and shall bind Guarantor’s heirs, successors and assigns, and may be enforced by or for the benefit of any assignee or successor of Purchaser. Purchaser shall not be obligated to take any action against the Seller prior to taking any action against the Guarantor. Guarantor shall pay Purchaser for all its overhead and expenses incurred in enforcing this guarantee and underlying Agreement, including all Purchaser’s reasonable attorney’s fees. The release and/or compromise of any obligation of Seller or any other obligors and guarantors shall not in any way release Guarantor from his or her obligations under this guarantee. This guarantee shall be governed and construed according to the laws of the State of New York. ALL ACTIONS, PROCEEDINGS OR LITIGATION RELATING TO OR ARISING FROM THIS GUARANTEE OR UNDERLYING AGREEMENT SHALL BE INSTITUTED AND PROSECUTED EXCLUSIVELY IN THE FEDERAL OR STATE COURTS LOCATED IN THE STATE AND COUNTY OF NEW YORK NOTWITHSTANDING THAT OTHER COURTS MAY HAVE JURISDICTION OVER THE PARTIES AND THE SUBJECT MATTER, AND GUARANTOR FREELY CONSENTS TO THE JURISDICTION OF THE FEDERAL OR STATE COURTS LOCATED IN THE STATE AND COUNTY OF NEW YORK. Service of process by certified mail to Guarantor’s address listed below or such other address that Guarantor may provide Purchaser in writing from time to time will be sufficient for jurisdictional purposes. GUARANTOR FREELY WAIVES, INSOFAR AS PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION, PROCEEDING OR LITIGATION ARISING FROM OR IN ANY WAY RELATING TO THIS GUARANTEE. GUARANTOR WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO PURSUE A CLAIM AGAINST PURCHASER OR ITS ASSIGNS AS PART OF A CLASS ACTION, PRIVATE ATTORNEY GENERAL ACTION OR OTHER REPRESENTATIVE ACTION. Guarantor grants continued authority to Purchaser and its agents and representatives and any credit reporting agency employed by Purchaser to obtain Guarantor’s credit report and/or other investigative reports, and to investigate any references given or any other statements or data obtained from or about Guarantor or Seller or any of Seller’s principals for the purpose of this guarantee, Agreement or renewal thereof.

1. Methods of Collection; Use of Approved Processor.

Purchaser shall collect the cash attributable to the Specified Percentage in one of the following ways: (i) directly from Seller’s credit card processor; (ii) by debiting the Seller’s credit card processing deposit account or another of Seller’s accounts that has been approved by Purchaser; or (iii) by debiting an account established by the Seller with Purchaser’s approval specifically to hold funds that are due to Purchaser (“Dedicated Account”). Purchaser may decide in its sole discretion which of the three methods it will accept for the remittance of the Specified Percentage. If Purchaser elects to use method (i) or (ii), then Seller agrees to enter into an agreement with a credit card processor acceptable to Purchaser (“Approved Processor”). Purchaser reserves the right to change the collection method at any time, with five (5) days notice to Seller, if it is unable to collect funds on a consistent basis through the collection method initially selected.

1.1 Collection Directly from Processor.
If Purchaser agrees to accept the remittance of the Specified Percentage directly from the Seller’s Approved Processor, then Seller authorizes the Approved Processor to pay the Specified Percentage directly to Purchaser rather than to Seller until the Specified Amount has been received by the Purchaser from the Approved Processor. This authorization is irrevocable, absolute and unconditional. Seller further acknowledges and agrees that the Approved Processor will be acting on behalf of Purchaser to collect the Specified Percentage. Seller hereby irrevocably grants Approved Processor the right to hold the Specified Percentage and to pay Purchaser directly (at, before or after the time Approved Processor credits or remits to Seller the balance of the Future Receivables not sold by Seller to Purchaser) until the entire Specified Amount has been received by Purchaser. Seller acknowledges and agrees that the Approved Processor may provide Purchaser with Seller’s credit card, debit card and other payment card and instrument processing history, including without limitation Seller’s chargeback experience and any communications about Seller received by Approved Processor from a card processing system, as well as any other information Purchaser deems pertinent. Seller understands that Purchaser does not have any power or authority to control the Approved Processor’s actions with respect to the authorization, clearing, settlement and other processing of transactions and that Purchaser is not responsible for the Approved Processor’s actions. Seller agrees to hold Purchaser harmless for the Approved Processor’s actions or omissions.

1.2 Collection via ACH Withdrawals.
If Purchaser agrees to accept the remittance of the Specified Percentage by debiting the Seller’s credit card processing deposit account, then Seller (i) irrevocably authorizes the Approved Processor or their representative to provide daily reports to Purchaser regarding Seller’s credit card processing batch amounts, and (ii) irrevocably authorizes Purchaser, or its designated successor or assign to withdraw the Specified Percentages of the Future Receivables and any other amounts now due, hereinafter imposed, or otherwise owed in conjunction with this Agreement by initiating via the Automatic Clearing House (ACH) system debit entries to Seller’s account at the bank listed above or such other bank or financial institution that Seller may provide Purchaser with from time to time (“Bank Account”). In the event that Purchaser withdraws erroneously from the Bank Account, Seller authorizes Purchaser to credit the Bank Account for the amount erroneously withdrawn via ACH. Purchaser shall not be required to credit the Bank Account for amounts withdrawn related to credit card transactions which are subsequently reversed for any reason. Purchaser, in its sole discretion, may elect to offset any such amount from collections from Future Receivables. Seller represents that the Bank Account is established for business purposes only and not for personal, family, or household purposes. Seller understands that the foregoing ACH authorization is a fundamental condition to induce Purchaser to enter into this Agreement.

Before 2:00 P.M. EST of the day following each day that Seller conducts business, Seller shall cause Approved Processor or Approved Processor’s agent to deliver to Purchaser, in a format acceptable to Purchaser, a record from Approved Processor reflecting the total gross dollar amount of the preceding day’s credit card transactions processed by Approved Processor for Seller, irrespective of whether such amount consists of sales, taxes or other amounts collected by Seller from its customers (“Daily Batch Amount”). In the event that Seller is unable to procure Approved Processor’s compliance in a timely manner or as otherwise required under this section, within two (2) business days’ written notice by Purchaser to Seller of the same via facsimile to Seller at the fax number listed herein, Seller shall at its sole expense terminate its relationship with Approved Processor and exclusively engage the services of an alternative credit card processor that Purchaser approves in writing and enter into any merchant credit card processing agreement as the alternative credit card processor may require, which credit card processor shall thereafter be referred to and included within the meaning of “Approved Processor” herein. Alternatively, in the event of Approved Processor’s noncompliance, Purchaser is hereby authorized to estimate the Daily Batch Amount based upon Purchaser’s analysis of Seller’s historical experience and to collect the Specified Percentage of the Future Receivables as provided in Section 2 of this Agreement based upon such estimate. Purchaser will make appropriate adjustments upon the submission by Seller of statements with respect to the period of Approved Processor’s non-compliance. Further, Seller hereby irrevocably authorizes Purchaser to obtain information regarding its other bank account(s) from Approved Processor and/or from the sales agent, and to debit such bank account(s) in the event that Purchaser is unable to debit the Specified Percentage from Seller’s credit card processing account.

1.3 Collection from a Dedicated Account.
If Purchaser agrees to accept the remittance of the Daily Percentage by debiting a Dedicated Account, Seller agrees to complete all necessary forms to establish the Dedicated Account. Seller (i) irrevocably authorizes and will require Seller’s processor to deposit directly into the Dedicated Account a daily amount corresponding to Seller’s Daily Batch Amount multiplied by the Specified Percentage; and (ii) acknowledges and agrees that any funds deposited into the Dedicated Account by Seller’s processor will remain in the Dedicated Account until the Specified Percentage is withdrawn by Purchaser and then the remaining funds, minus any amount required to maintain the minimum balance for the account, will be forwarded to Seller’s Bank Account. If the Dedicated Account requires a minimum account balance, Purchaser may, in its sole discretion, fund the required minimum balance for the Dedicated Account out of the Purchase Price. Seller acknowledges and agrees that it shall not have the right to directly withdraw funds from the Dedicated Account.

2. Processing Trial; Commencement of Agreement. After this Agreement has been signed by Seller but prior to Purchaser’s acceptance, the parties shall conduct a processing trial of four or fewer business days in order to ensure that the Seller’s credit card transactions are being correctly processed through Approved Processor and that Purchaser timely receives the Daily Batch Amount in a satisfactory manner and format. Nothing herein shall create an obligation upon Purchaser to enter into this Agreement. The Agreement shall commence upon Purchaser’s payment to Seller of the Purchase Price.

3. Seller’s Covenants, Representations and Warranties. Seller and Guarantor represent, warrant and covenant the following as of this date and during the term of this Agreement:
a) Seller represents that it is not contemplating closing its business.
b) Seller represents that it has not commenced any case or proceeding seeking protection under any bankruptcy
or insolvency law, or had any such case or proceeding commenced against it, and it is not contemplating
commencing any such case or proceeding.
c) Seller represents that the Future Receivables are free and clear of all claims, liens or encumbrances of any
kind whatsoever.
d) Seller represents that it does not intend to temporarily close its business for renovations or other reasons
during the next twelve months.
e) Seller shall not take any action to discourage the use of credit cards which are settled through its processor or
to permit any event to occur which could have an adverse effect on the use, acceptance or authorization of credit cards for the purchase of Seller’s services and products;
f) Seller shall not change its arrangements with its credit card processor in any way which is adverse to Purchaser;
g) Seller shall not change the credit card processor through which the major credit cards are settled from Approved Processor to another credit card processor or to permit any event to occur that could cause a diversion of any of Seller’s credit card transactions to another processor without Purchaser’s prior written consent;
h) Seller represents that as of this date, all Seller’s credit card sales and transactions are being processed exclusively with Approved Processor or are being deposited exclusively into a Dedicated Account;
i) Seller shall not sell, dispose, convey or otherwise transfer its business or assets without the express prior written consent of Purchaser; Seller shall not enter into a concurrent agreement for the purchase and sale of future receivables with any purchaser aside from First Funds.
j) Seller shall furnish Purchaser with the bank statements for its Bank Account and any and all other accounts to which proceeds from Seller’s sales are deposited within seven (7) days’ of any such request by Purchaser;
k) Seller shall unconditionally ensure that the cash Seller receives from Approved Processor attributable to the
Specified Percentage of the Future Receivables is immediately thereafter available to Purchaser for collection
via ACH from Seller’s Bank Account;
l) Seller shall not attempt to revoke its ACH authorization to Purchaser set forth in this Agreement or otherwise
take any measure to interfere with Purchaser’s ability to collect the cash that Seller receives (i) from Approved Processor attributable to the Specified Percentage of the Future Receivables or (ii) from the Dedicated Account;
m) Seller shall not close its Dedicated Account, or close or change the bank account into which Approved Processor deposits the Future Receivables to another account without Purchaser’s prior written consent;
n) Seller shall not conduct its businesses under any name other than as disclosed to Purchaser or change any of its places of business without Purchaser’s prior written consent; and
o) Seller represents that the information it furnished Purchaser in this Agreement and preceding application, including without limitation, Seller’s processing statements, is true and accurate in all respects and fairly represents the financial condition, result of operations and cash flows of Seller at such dates, and since the dates therein, there has been no material adverse change in the business or its prospects or in the financial condition, results of operations, or cash flows of Seller.

4. Agency; Modifications & Amendments; Entire and Final Agreement. Purchaser does not have any power or authority or control over Approved Processor’s actions with respect to the processing of Seller’s credit card transactions. Purchaser is an entirely separate and independent entity from the Processor and ISO (if any) and their respective agents. Neither Approved Processor nor ISO (if any) is Purchaser’s agent and neither is authorized to waive or alter any term or condition of this Agreement and their representations shall in no way affect Seller’s or Purchaser’s rights and obligations set forth herein. This Agreement contains the entire and final expression of the agreement between the parties, and may not be waived, altered, modified, revoked or rescinded except by a writing signed by one of Purchaser’s executive officers. All prior and/or contemporaneous oral and written representations are merged herein. No attempt at oral modification or rescission of this Agreement or any term thereof will be binding upon the parties.

5. Governmental Approvals. Seller possesses and is in compliance with all permits, licenses, approvals, consents and other authorizations necessary to own, operate and lease its properties and to conduct the business in which it is presently engaged. Seller is in compliance with any and all applicable federal, state, and local laws and regulations, including, without limitation, all laws and regulations relating to the prosecution of the confidentiality of information received from credit card users.

6. Exclusive Use of Processor. Seller understands that services of Approved Processor are the exclusive means by which Seller may process its credit card transactions, unless it has set up a Dedicated Account, in which case all of Seller’s credit card processing must be subject to daily withholding of the Specified Percentage in the Dedicated Account.

7. Sale of Future Receivables; Non-Consumer Transaction. Seller and Purchaser agree that the Purchase Price paid by Purchaser in exchange for the Specified Amount of Future Receivables is for the purchase and sale of the Specified Amount of Future Receivables and is not intended to be, nor shall it be construed as, a loan or an assignment for security from Purchaser to the Seller. Seller and Guarantor hereby acknowledge and agree that neither party is a “consumer” with respect to this Agreement and underlying transaction, and neither this Agreement nor any guarantee thereof shall be construed as a consumer transaction.

8. No Right to Repurchase. Seller acknowledges that it has no right to repurchase the Specified Amount of Future Receivables from Purchaser.

9. Sale of Additional Future Receivables; Schedules; Right of First Refusal. Nothing herein shall obligate either party to sell and purchase future credit card receivables; however, Seller grants Purchaser the right of first refusal to purchase any such additional future credit card receivables that Seller may wish to sell during the term of this Agreement and during the period ending ninety (90) days after termination of this Agreement. Under such right of first refusal, if Seller desires to sell additional future credit card receivables, Seller agrees to sell such receivables to Purchaser only, and not to any other prospective purchaser, so long as Purchaser purchases such future credit card receivables on terms that are no less favorable to Seller as the terms and conditions of this Agreement.

10. Default. A “Default” shall include, but not be limited to, any of the following events: (a) The breach by Seller of any covenants contained in this Agreement; (b) Any representation or warranty made by the Seller in this Agreement, proving to have been incorrect, false or misleading in any material respect.

11. Remedies. In the event of a Default, Purchaser shall be entitled to all remedies available under law. Without limiting the generality of the foregoing, in the event of Seller’s default under Section 10 herein, Purchaser will be entitled to require Seller to purchase the remaining Future Receivables for an amount equal to the amount by which the Specified Amount of Future Receivables exceeds the amount of cash received from Future Receivables that Purchaser had previously collected under this Agreement, which amount Purchaser may automatically debit from Seller’s Bank Account via ACH without notice to Seller. No failure on the part of Purchaser to exercise, nor any delay in exercising any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise of any other right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

12. UCC-1 Financing Statements. Seller authorizes Purchaser to file one or more UCC-1 Financing Statements prior to each sale of Future Receivables for purposes of providing public notice of the purchase by Purchaser from Seller of the Specified Amount of Future Receivables. The UCC-1 Financing Statements will state that the sale of the Future Receivables is an outright sale and not an assignment for security.

13. Notices. All notices, requests, demands and other communications hereunder, including disputes or inaccuracies concerning information furnished to credit reporting agencies shall be, unless otherwise provided herein, in writing and shall be delivered by mail, overnight delivery or hand delivery to the respective parties to this Agreement at their respective addresses listed on the face of this Agreement or at such other address that either may provide to the other in writing from time to time.

14. Binding Effect; Assignment. This Agreement shall be binding upon and inure to the benefit of Seller, Purchaser and their respective successors and assigns, except that Seller shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of Purchaser which consent may be withheld at Purchaser’s sole discretion. Purchaser may assign this Agreement without notice to Seller.

15. Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Seller consents to the jurisdiction of the federal and state courts located in the State and County of New York and agrees that such courts shall be the exclusive forum for all actions, proceedings or litigation arising out of or relating to this Agreement or subject matter thereof, notwithstanding that other courts may have jurisdiction over the parties and the subject matter thereof. Service of process by certified mail to Seller’s address listed on the face of this Agreement will be sufficient for jurisdictional purposes.

16. Purchaser’s Costs of Enforcement; Attorney’s Fees. Purchaser shall be entitled to receive from Seller and Seller shall pay to Purchaser, all Purchaser’s costs and expenses, including Purchaser’s collections overhead and Purchaser’s reasonable attorney’s fees, in enforcing any of the terms of this Agreement, regardless of whether or not a legal action has been commenced. If Seller files action against Purchaser and the matter is dismissed or Purchaser prevails in the matter, Seller agrees to pay all of Purchaser’s attorney fees and costs incurred whether in court or arbitration.

17. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.

18. Limitation of Liability. In no event will Purchaser be liable for any claims asserted by Seller under any theory of law, including any tort or contract theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby expressly waived to the fullest extent permitted by law by Seller.

19. Waiver Of Jury Trial; Limitation On Action. PURCHASER AND SELLER KNOWINGLY, WILLINGLY AND VOLUNTARILY WAIVE, INSOFAR AS PERMITTED BY LAW, TRIAL BY JURY IN ANY ACTION, PROCEEDING OR LITIGATION BROUGHT BY PURCHASER, SELLER OR GUARANTOR HERETO ARISING FROM OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE UNDERLYING TRANSACTION. SELLER SHALL COMMENCE ANY ACTION OR COUNTERCLAIM BASED IN CONTRACT, TORT OR OTHERWISE ARISING FROM OR IN ANY WAY RELATING TO THIS AGREEMENT OR THE UNDERLYING TRANSACTION WITHIN ONE YEAR OF THE ACCRUAL OF THAT CAUSE OF ACTION AND NO SUCH ACTION MAY BE MAINTAINED WHICH IS NOT COMMENCED WITHIN THAT PERIOD. SELLER KNOWINGLY, WILLINGLY AND VOLUNTARILY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO PURSUE A CLAIM AGAINST PURCHASER AS PART OF A CLASS ACTION, PRIVATE ATTORNEY GENERAL ACTION OR OTHER REPRESENTATIVE ACTION.

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2006 AdvanceMe Contract

In exchange for payment by Company to Merchant of the purchase price specified below (“Purchase Price”), Company hereby purchases from Merchant and Merchant hereby sells to Company all of Merchant’s right, title and interest in and to the amount specified below (“Specified Amount”) of Merchant’s future receivables (“Future Receivables”) arising from payments by Merchant’s customers with cards (“Cards”) of a type settled, directly or indirectly, by Processor (as defined below). Merchant will remit the Specified Amount of Future Receivables to Company by causing a processor acceptable to Company (“Processor”) to pay Company each day an amount of cash equal to the percentage specified below (“Specified Percentage”) of all Card receivables due to Merchant on the day in question (“Receivables”). Company will continue to receive the Specified Percentage of Receivables until Merchant has remitted to Company the entire Specified Amount of Future Receivables.

Company will not increase the Specified Percentage without Merchant’s prior written consent. Merchant (i) will enter into an agreement acceptable to Company with Processor to obtain processing services (“Processing Agreement”) and (ii) hereby authorizes Processor and/or Operator (as defined below) to pay daily the cash attributable to the Specified Percentage of Receivables to Company rather than to Merchant and to debit the Account (as defined below) in such amounts until Company receives the cash attributable to the entire Specified Amount of Future Receivables.

Merchant agrees (i) to conduct its business consistent with past practice; (ii) to exclusively use Processor for the processing of all of its Card transactions, to not change its arrangements with Processor in any way that is adverse to Company and to not take any action that has the effect of causing the processor through which Cards are settled to be changed from Processor to another processor; (iii) to not take any action to discourage the use of Cards and to not permit any event to occur that could have an adverse effect on the use, acceptance or authorization of Cards for the purchase of Merchant’s services and/or products; (iv) to not open a new account other than the Account to which Card settlement proceeds will be deposited and to not take any action to cause Future Receivables or Receivables to be settled or delivered to any account other than the Account; (v) not to sell, dispose, convey or otherwise transfer its business or assets without the express prior written consent of Company and the assumption of all of Merchant’s obligations under this Agreement pursuant to documentation reasonably satisfactory to Company; and (vi) to maintain a Minimum Balance (as defined below) in the Account (collectively, the “Merchant Contractual Covenants”).

The owners of Merchant (such owners, whether shareholders, partners, members or other owners are referred to herein as “Owners”) hereby guarantee the performance of all of the covenants made by Merchant in this Agreement, including the Merchant Contractual Covenants.

To the extent set forth herein, each of the parties is obligated upon his, her or its execution of the Agreement to all terms of the Agreement, including the Additional Terms set forth below. Each of above-signed Merchant and Owner(s) represents that he or she is authorized to sign this Agreement for Merchant and that the information provided herein and in all of Company’s forms is true, accurate and complete in all respects. If any such information is false or misleading, Merchant shall be deemed in material breach of all agreements between Merchant and Company and Company shall be entitled to all remedies available under law. Company may produce a monthly statement reflecting the delivery of the Specified Percentage of Receivables from Merchant via Processor and/or Operator. Merchant hereby agrees to a $___ administrative fee per month for the production of the monthly statement and further agrees that Company and its designees may debit such administrative fee from Merchant’s bank account each month via the automated clearing house (“ACH”) system. An investigative or consumer report may be made in connection with the Agreement. Merchant and each of the above- signed Owners authorizes Company, its agents and representatives and any credit reporting agency engaged by Company, to (i) investigate any references given or any other statements or data obtained from or about Merchant or any of its Owners for the purpose of this Agreement, and (ii) pull credit reports at any time now or for so long as Merchant and/or Owner(s) continue to have any obligation owed to Company as a consequence of this Agreement or for Company’s ability to determine Merchant’s eligibility to enter into any future agreement with Company.

I. PROCESSING TERMS AND ARRANGEMENTS.
Section 1.1. Processing Agreement. Merchant understands and agrees that the Processing Agreement and the authorizations to debit set forth above irrevocably authorize Processor and Operator to pay the cash attributable to the Specified Percentage of Receivables to Company rather than to Merchant until Company receives the cash attributable to the entire Specified Amount of Future Receivables from Processor and/or Operator. These authorizations may be revoked only with the prior written consent of Company. Merchant agrees that Processor and Operator may rely upon the instructions of Company, without any independent verification, in making the cash payments described above. Merchant waives any claim for damages it may have against Processor or Operator in connection with actions taken based on instructions from Company, unless such damages were due to such Processor’s or Operator’s failure to follow Company’s instructions. Merchant acknowledges and agrees that (a) Processor and Operator will be acting on behalf of Company with respect to the Specified Percentage of Receivables until the cash attributable to the entire Specified Amount of Future Receivables has been remitted by Processor and/or Operator to Company, (b) Processor and Operator may or may not be affiliates of Company, (c) Company does not have any power or authority to control Processor’s or Operator’s actions with respect to the processing of Card transactions or remittance of cash to Company, and (d) Company is not responsible for, and Merchant agrees to hold Company harmless for, the actions of Processor and Operator. For purposes of this Agreement, the term “Operator” shall mean any party Company designates to debit any amounts from Merchant’s or Owners’ accounts as authorized or permitted by this Agreement.

Section 1.2. Instructions to Processor. Merchant will irrevocably instruct Processor to hold the Specified Percentage of Receivables on behalf of Company and to remit directly to Company the cash attributable thereto at the same time it remits to Merchant the cash attributable to the balance of the Receivables. Merchant acknowledges and agrees that Processor shall provide Company with Merchant’s Card transaction history.

Section 1.3. Indemnification. Merchant indemnifies and holds each of Processor and Operator, their respective officers, directors, affiliates, employees, agents and representatives harmless from and against all losses, damages, claims, liabilities and expenses (including reasonable attorneys’ fees) suffered or incurred by Processor or Operator resulting from actions taken by Processor or Operator in reliance upon information or instructions provided to Processor or Operator by Company.

Section 1.4. Limitation of Liability. In no event will Processor, Operator or Company be liable for any claims asserted by Merchant under any theory of law, including any tort or contract theory for lost profits, lost revenues, lost business opportunities, exemplary, punitive, special, incidental, indirect or consequential damages, each of which is hereby expressly waived by Merchant.

Section 1.5. Processor Commissions. Merchant understands and agrees that Processor will charge a fee or commission for processing receipts of Receivables (the “Processor’s Fee”) as set forth in the Processing Agreement and that the Processor’s Fee will be deducted from the portion of the Receivables payable to Merchant and not from the cash attributable to the Specified Percentage of Receivables payable to Company.

Section 1.6. No Modifications. Merchant will comply with the Processing Agreement and will not modify the Processing Agreement in any manner that could have an adverse effect upon Company’s interests, without Company’s prior written consent.

Section 1.7. Account. Merchant represents and warrants that Merchant’s sole bank account (“Account”) into which all settlement proceeds of Receivables will be deposited is that account identified by account name, account number and bank name and address that is shown on the face of the voided check that Merchant shall provide to Company along with this Agreement, the delivery of which voided check is a condition precedent to Company’s obligations under this Agreement. If Processor transfers to the Account or any other account of Merchant or Owner(s) any funds that should have been transferred to Company pursuant to Sections 1.1 and 1.2 hereof, or if Merchant otherwise has monies deposited in its or Owner(s)’s account(s) that otherwise should have been transferred to Company pursuant to Sections 1.1 and 1.2 hereof, Merchant shall immediately segregate and hold all such funds in express trust for Company’s sole and exclusive benefit. In any such circumstance, Merchant shall maintain in the Account a minimum balance equal to Company’s undivided interest in such funds or the Specified Percentage multiplied by the Merchant’s average daily Card volume based on the processing records provided to Company prior to the execution of this Agreement (assuming twenty-one days of processing per month) multiplied by three (3), whichever is greater (“Minimum Balance”), until such funds are paid to Company. Merchant and each Owner authorizes Company, Processor and Operator to debit such funds directly from all such accounts, including the Account, and agrees to not revoke or cancel such authorizations until such time as Company has received the entire Specified Amount of Future Receivables. Merchant acknowledges and agrees that Company, Processor and Operator may issue a pre-notification to Merchant’s and/or Owner(s)’s bank(s) with respect to such debit transactions. Within twenty-four (24) hours of any request by Company, Merchant shall provide, or cause Processor or Operator to provide, Company with records and other information regarding Merchant’s Card sales, the Account and any other accounts of Merchant or Owner(s).

Section 1.8. Processing Trial. After this Agreement has been signed by both Merchant and Company but prior to Company’s determination as to whether to pay the Purchase Price, Merchant agrees to permit Company to instruct Processor and/or Operator to conduct a short processing trial (the “Processing Trial”) to ensure that Merchant’s Card transactions are being correctly processed through Processor and that the cash attributable to the Specified Percentage of Receivables will be appropriately remitted to Company. Company agrees to make a determination as to whether to purchase the Specified Amount of Future Receivables promptly after the commencement of the Processing Trial. If Company elects to purchase the Specified Amount of Future Receivables, then all of the cash received by Company in connection with the Processing Trial prior to the payment of the Purchase Price shall be applied to reduce the Specified Amount. Nothing herein shall create an obligation on behalf of Company to purchase any Future Receivables, and Company expressly reserves the right to not purchase the Specified Amount of Future Receivables and not pay the Purchase Price to Merchant. If Company decides to not purchase the Specified Amount of Future Receivables and not pay the Purchase Price, this Agreement shall have no further effect and Company shall, promptly after receipt from Processor or Operator, return to Merchant any cash received by Company in connection with the Processing Trial.

Section 1.9. Excess Cash. In the event that the amount of cash remitted to Company pursuant to this Agreement exceeds the Specified Amount (such excess being the “Excess Cash”) by at least $20.00, Company agrees to pay such Excess Cash to Merchant within thirty (30) days after receipt thereof by Company. In the event the Excess Cash is less than $20.00, Company agrees to pay such Excess Cash to Merchant within thirty (30) days after its receipt of a written request from Merchant, provided such request is made within six months of Company’s receipt of such Excess Cash. Merchant acknowledges and agrees that Company has no obligation to take any action (including against Processor or Operator) with respect to any cash being held by Processor or Operator, which will become Excess Cash once it is paid by Processor or Operator to Company, prior to the receipt of such Excess Cash by Company.

Section 1.10. Reliance on Terms. The provisions of this Agreement are agreed to for the benefit of Merchant, Owner(s), Company, Processor and Operator and, notwithstanding the fact that Processor and Operator are not parties to this Agreement, they may rely upon the terms of this Agreement and raise them as defenses in any action.

II. REPRESENTATIONS, WARRANTIES AND COVENANTS.
Merchant and Owner(s) represent, warrant and covenant the following as of the date hereof and during the term of this Agreement:

Section 2.1. Merchant Contractual Covenants. Merchant shall comply with each of the Merchant Contractual Covenants as set forth herein.

Section 2.2. Business Information. All information (financial and other) provided by or on behalf of Merchant to Company in connection with the execution of or pursuant to this Agreement is true, accurate and complete in all respects. Merchant shall furnish Company, Processor and Operator such information as Company may request from time to time.

Section 2.3. Reliance on Information. Merchant acknowledges and agrees that all information (financial and other) provided by or on behalf of Merchant has been relied upon by Company in connection with its decision to purchase the Specified Amount of Future Receivables.

Section 2.4. Compliance. Merchant is in compliance with any and all applicable federal, state and local laws and regulations and rules and regulations of card associations and payment networks. Merchant possesses and is in compliance with all permits, licenses, approvals, consents, registrations and other authorizations necessary to own, operate and lease its properties and to conduct the business in which it is presently engaged.

Section 2.5. Authorization. Merchant and the person(s) signing this Agreement on behalf of Merchant have full power and authority to enter into and perform the obligations under this Agreement and the Processing Agreement, all of which have been duly authorized by all necessary and proper actions.

Section 2.6. Insurance. Merchant shall maintain insurance in such amounts and against such risks as are consistent with past practice and shall show proof of such insurance upon the request of Company. Section 2.7. Change Name or Location. Merchant does not and shall not conduct Merchant’s business under any name other than as disclosed to Company and Processor and shall not change its place of business.

Section 2.8. Merchant Not Indebted to Company. Merchant is not a debtor of Company as of the date of this Agreement.

Section 2.9. Exclusive Use of Processor. Merchant understands and agrees that the services of Processor are the exclusive means by which Merchant can and shall process its Card transactions.

Section 2.10. Working Capital Funding. Merchant shall not enter into any arrangement, agreement or commitment that relates to or involves Future Receivables, whether in the form of a purchase of, a loan against, or the sale or purchase of credits against, Future Receivables or future Card sales with any party other than Company.

Section 2.11. Unencumbered Future Receivables. Merchant has good, complete and marketable title to all Future Receivables, free and clear of any and all liabilities, liens, claims, charges, restrictions, conditions, options, rights, mortgages, security interests, equities, pledges and encumbrances of any kind or nature whatsoever or any other rights or interests that may be inconsistent with the transactions contemplated with, or adverse to the interests of, Company.

Section 2.12. Business Purpose. Merchant is a valid business in good standing under the laws of the jurisdictions in which it is organized and/or operates, and Merchant is entering into this Agreement for business purposes and not as a consumer for personal, family or household purposes.

III. ADDITIONAL TERMS.

Section 3.1. Sale of Future Receivables. Merchant and Company agree that the Purchase Price paid by Company in exchange for the Specified Amount of Future Receivables is a purchase of the Specified Amount of Future Receivables and is not intended to be, nor shall it be construed as, a loan or financial accommodation from Company to Merchant.

Section 3.2. No Right Merchant acknowledges and agrees that it has no right to repurchase the Specified Amount of Future Receivables from Company and Company may not force Merchant to repurchase the Specified Amount of Future Receivables.

Section 3.3. Remedies. In the event that any of the representations or warranties contained in this Agreement is not true, accurate and complete, or in the event of a breach of any of the covenants contained in this Agreement, including the Merchant Contractual Covenants, Company shall be entitled to all remedies available under law, including the right to non-judicial foreclosure. In the event that Merchant breaches any of the Merchant Contractual Covenants specified in clauses (ii) or (iv) on the first page of this Agreement, Merchant agrees that Company shall be entitled to, but not limited to, damages equal to the amount by which the cash attributable to the Specified Amount of Future Receivables exceeds the amount of cash received from Receivables that have previously been delivered by Merchant to Company pursuant to this Agreement. Merchant hereby agrees that Company and Operator may automatically debit such damages from Merchant’s bank accounts via the ACH system or wire transfers. The obligations of Owners, including the guarantee on the first page of this Agreement are primary and unconditional and each Owner waives any rights to require Company to first proceed against Merchant.

Section 3.4. Financing Statements. To secure performance of the Merchant Contractual Covenants and all of the other obligations of Merchant to Company under this Agreement or any other agreement between Merchant and Company, Merchant grants to Company a continuing priority security interest, subject only to the security interest of Processor, if any, in the following property of Merchant wherever found: (a) All personal property of Merchant, including, all accounts, chattel paper, documents, equipment, general intangibles, instruments, inventory (as those terms are defined in Article 9 of the Uniform Commercial Code (“UCC”) in effect from time- to-time in the State of New York), and liquor licenses, wherever located, now or hereafter owned or acquired by Merchant; (b) all trademarks, trade names, service marks, logos and other sources of business identifiers, and all registrations, recordings and applications with the U.S. Patent and Trademark Office (“USPTO”) and all renewals, reissues and extensions thereof (collectively “IP”) whether now owned or hereafter acquired, together with any written agreement granting any right to use any IP; and (c) all proceeds with respect to the items described in (a) and (b) above, as the term “proceeds” is defined in Article 9 of the UCC. Merchant understands and agrees that Company may file one or more (i) UCC-1 financing statements at anytime to perfect the interest created under the UCC upon the sale, and (ii) assignments with USPTO to perfect the security interest in IP described above. The UCC-1 financing statements may state that the sale of the Specified Amount of Future Receivables is intended to be a sale and not an assignment for security.

Section 3.5. Protection of Information. Merchant and each person signing this Agreement on behalf of Merchant and/or as Owner, in respect of himself or herself personally, authorizes Company to disclose to any third party information concerning Merchant’s and each Owner’s credit standing (including credit bureau reports that Company obtains) and business conduct. Merchant and each Owner hereby waives to the maximum extent permitted by law any claim for damages against Company or any of its affiliates relating to any (i) investigation undertaken by or on behalf of Company as permitted by this Agreement or (ii) disclosure of information as permitted by this Agreement.

Section 3.6. Solicitations. Merchant and each Owner authorizes Company and its affiliates to communicate with, solicit and/or market to Merchant and each Owner via regular mail, telephone, email and facsimile in connection with the provision of goods or services by Company, its affiliates or any third party that Company shares, transfers, exchanges, discloses or provides information with or to pursuant to Section 3.5 and will hold Company, its affiliates and such third parties harmless against any and all claims pursuant to the federal CAN-SPAM ACT of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003), the Telephone Consumer Protection Act (TCPA), and any and all other state or federal laws relating to transmissions or solicitations by any of the methods described above.

Section 3.7. Confidentiality. Merchant understands and agrees that the terms and conditions of the products and services offered by Company, including this Agreement and any other Company documentation (collectively, “Confidential Information”) are proprietary and confidential information of Company. Accordingly, unless disclosure is required by law or court order, Merchant shall not disclose Confidential Information to any person other than an attorney, accountant, financial advisor or employee of Merchant who needs to know such information for the purpose of advising Merchant (“Advisor”), provided such Advisor uses such information solely for the purpose of advising Merchant and first agrees in writing to be bound by the terms of this Section 3.7).
Section 3.8. Publicity. Merchant and each Owner authorizes Company to use its, his or her name in a listing of clients and in advertising and marketing materials.

IV. MISCELLANEOUS.
Section 4.1. Modifications; Amendments; Construction. No modification, amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the parties affected. The headings of the sections and subsections herein are inserted for convenience only and under no circumstances shall they affect in any way the meaning or interpretation of this Agreement. For purposes of this Agreement, “including” shall mean “including, without limitation”.

Section 4.2. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be delivered by mail, overnight delivery or hand delivery to the respective parties to this Agreement. Notices to Company shall be sent to the following address:
Advanceme, Inc.
c/o General Counsel
2 Overhill Road, Suite 410 Scarsdale, NY10583-5323

Section 4.3. Waiver; Remedies. No failure on the part of Company to exercise, and no delay in exercising, any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise of any other right. The remedies provided hereunder are cumulative and not exclusive of any remedies provided by law or equity.

Section 4.4. D/B/A’s. Merchant hereby acknowledges and agrees that Company may be using “doing business as” or “d/b/a” names in connection with various matters relating to the transaction between Company and Merchant, including the filing of UCC-1 financing statements and other notices or filings.

Section 4.5. Binding Effect. This Agreement shall be binding upon and inure to the benefit of Merchant, Owner(s), Company and their respective successors and assigns, except that Merchant and Owner(s) shall not have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of Company, which consent may be withheld in Company’s sole discretion. Company reserves the right to assign this Agreement or its rights or obligations hereunder with or without prior notice to Merchant.

Section 4.6. Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to principles of conflicts of law. Merchant hereby submits to the jurisdiction of any New York state or federal court sitting in the Borough of Manhattan of the City of New York or any Georgia state or federal court sitting in Cobb County. Merchant hereby waives any claim that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Agreement or the transactions of which this Agreement is a part may not be enforced in or by any of the above-named courts.

Section 4.7. Costs. Company shall be entitled to receive from Merchant and/or Owner, and Merchant and/or Owner shall pay, all reasonable costs associated with a breach by Merchant of any of the Merchant Contractual Covenants or other obligations or any of the representations and warranties of Merchant and the enforcement thereof, including court costs and attorney’s fees.

Section 4.8. Term and Survival. This Agreement shall continue in full force and effect until all obligations hereunder have been satisfied in full; provided, however, that Sections 1.3, 1.4, 3.3, 3.6, 3.7, 3.8, 4.7, 4.12 and 4.13 shall survive indefinitely.

Section 4.9. Severability. In case any one or more of the provisions contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby.

Section 4.10. Counterparts and Facsimile Signatures. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which when taken together shall constitute one and the same agreement. Facsimile signatures shall be deemed to be original signatures and each party hereto may rely on a facsimile signature as an original for purposes of enforcing this Agreement.

Section 4.11. Entire Agreement. This Agreement contains the entire agreement and understanding between Merchant, Owners and Company and supersedes all prior agreements and understandings, whether oral or in writing, relating to the subject matter hereof unless otherwise specifically reaffirmed or restated herein.

Section 4.12. Jury Trial Waiver. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS OF WHICH THIS AGREEMENT IS A PART OR THE ENFORCEMENT HEREOF, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW OR DEEMED BY A COURT OF LAW TO BE AGAINST PUBLIC POLICY . THE PARTIES HERETO ACKNOWLEDGE THAT EACH MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY AND WITHOUT DURESS, AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS.

Section 4.13. Class Action Waiver. THE PARTIES HERETO WAIVE ANY RIGHT TO ASSERT ANY CLAIMS AGAINST THE OTHER PARTY AS A REPRESENTATIVE OR MEMBER IN ANY CLASS OR REPRESENTATIVE ACTION, EXCEPT WHERE SUCH WAIVER IS PROHIBITED BY LAW AGAINST PUBLIC POLICY. TO THE EXTENT EITHER PARTY IS PERMITTED BY LAW OR COURT OF LAW TO PROCEED WITH A CLASS OR REPRESENTATIVE ACTION AGAINST THE OTHER, THE PARTIES HEREBY AGREE THAT: (1) THE PREVAILING PARTY SHALL NOT BE ENTITLED TO RECOVER ATTORNEYS’ FEES OR COSTS ASSOCIATED WITH PURSUING THE CLASS OR REPRESENTATIVE ACTION (NOT WITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT); AND (2) THE PARTY WHO INITIATES OR PARTICIPATES AS A MEMBER OF THE CLASS WILL NOT SUBMIT A CLAIM OR OTHERWISE PARTICIPATE IN ANY RECOVERY SECURED THROUGH THE CLASS OR REPRESENTATIVE ACTION.

——————–
Many sections of these contracts have been used, reused, rewritten, distributed, and redistributed by 3rd parties and are considered to be in the public domain. Sections are reproduced here for educational purposes. If you believe any section violates a copyright, e-mail webmaster@merchantprocessingresource.com

The Merchant Cash Advance Abridged Bible

July 10, 2013
Article by:

Whether you’re an investment fund researching the merchant cash advance industry or an account rep that’s just been handed a phone book on his first day of work, these 5 slides will teach you almost everything you need to know:

Questions? E-mail sean@merchantprocessingresource.com

merchant cash advance bible

– Merchant Processing Resource
https://debanked.com
MPR.mobi on iPhone, iPad, and Android

10 Clues You’re Hardcore About Merchant Cash Advance

May 30, 2013
Article by:

You might eat and breathe funding small business, but unless you’ve got a set of pajamas like mine, you probably don’t sleep it too.

merchant cash advance pajamas

Yeah, Funding Just Got Serious…

Other signs you might be hardcore:

1. You miss your train back to Westchester, Long Island, Brooklyn, or North Jersey because of something someone said on DailyFunder:

just too interesting
the wire went out

  

  

2. You yawn whenever you reference millions of dollars…

funding $3 million was okay I gues
  

  

3. This is what you have for lunch every day…

account rep lunch
  

  

4. You know at least three people that talk about starting their own ISO on a daily basis but never do it…

starting an iso
  

  

5. You’ve realized that the only reason the MCA industry has grown so much in recent years is because of account reps like this…

what the ACH market has taken off
  

  

6. You’ve accidentally referred to your friends, relatives, or other non-business owners as merchants. “I mean hey, we’re all merchants here, right?

merchants?
  

  

7. You’ve gotten at least one trophy. Top Salesman, Hardest Working or…

loser trophy
  

  

8. You’ve worked for this guy before or you probably still do..

ucc calls
  

  

9. You’ve been on a totally great sales call and had a colleague walk in the room and do one of these to ruin it…


  

  

10. But most of all, if you help your clients in a timely manner and they look like this…

happy merchant

Then you’ll always be hardcore in their eyes!

  

View More Merchant Cash Advance Memes on DailyFunder

– Merchant Processing Resource
https://debanked.com
MPR.mobi on iPhone, iPad, or Android

Coming In From the Cold: Connecting With Prospects

January 29, 2013
Article by:

ice cold callA small business owner posted a great question on the LinkedIn group “Small Business Networks for Startups and Entrepreneurs” board:

Are cold calls effective? Or is it old school? For a small company, what is the best way to promote the business? Any advice will be greatly appreciated.”

The small business owner who posted this question got more than her fair share of advice and opinions regarding the practice of cold calling. And, while most every single comment had a jewel of truth and wisdom when it comes to cold calling – the comments also conflicted with each other. For example:

Not only is it old school but its intrusive and offensive.”

Cold calling is old school indeed but it is still one of the most effective ways to reach prospects.”

So – which is it? Offensive or Effective?

Fortunately for the small business owner uncertain whether to pick up the phone there was one comment that simply rocked. Sandra Hoedemaker owner of ChefinDemand.com an online business coaching service specializing in providing services to personal chefs, posted a completely different perspective and approach to cold calling – something she calls “Connect Calling.”

Connecting is Warm – Cold is…well, Cold

Those commenters who identified cold calling as intrusive and offensive make a good point. Today’s consumer not only isn’t interested in hearing uninvited sales pitches, they can (and quite often do) find unscheduled sales calls as a definite intrusion into an already too busy day.

Sandra notes that she does, in fact, “cold call” and also indicates that these calls are always most successful when she is able to connect with the decision maker. So far her comment sounds like your run-of-the-mill cold calling advice. However, Sandra definitely breaks rank because she goes on to say that she “doesn’t sell on the phone.”

OK, if she’s cold calling, but not selling – what exactly IS Sandra doing when she makes those calls?

Sandra knows prospects aren’t interested in “being sold” – but they are interested in learning real ways to solve their problems and get their needs met. Sandra knows that the best way to do that is to establish her credibility as an expert who knows how to solve common problems and meet the special needs of her niche. How does she do that? She offers to provide them with carefully selected free services. This allows her to:

  • Build her email list and then connect with prospects freely because they have invited Sandra to contact them.
  • Stay connected to her prospects via blogging, teleclasses, and other virtual events (she’s also in the process of putting video presentations in place.)

Outside of the above, connecting with prospects versus cold calling prospects has resulted in Sandra receiving referrals and she’s also garnered invitations to speak as well. Sandra has successfully used Connect Calling as a tactic to connect with prospects in meaningful ways. She’s taken an “old school, annoying” tactic and turned it into a powerful tool to build a community of prospective buyers.

What is most impressive about her approach is the opportunity to begin to establish trust with prospects via Connect Calling. Offering useful, applicable free services and information allows prospects to begin to build a relationship where Sandra becomes a Trusted Advisor who’s got their back versus someone trying to make a sale. Sounds more like networking than cold calling doesn’t it?

And when those prospects pick up a phone to make a call when they find themselves in need of services Sandra charges for, Sandra’s much more likely to be the one who hears it ring.

Sandra’s business serves a unique niche – but Connect Calling can be a valid, productive, and profitable tactic to market your small business no matter what market you serve.

Guest Authored
– Merchant Processing Resource
https://debanked.com
MPR.mobi on iPhone, iPad, and Android

 

Movember Rocked!

December 1, 2012
Article by:

movemberMovember: Mo’ Merchants, Mo’ Deals

The pre-holiday season is usually big in the Merchant Cash Advance (MCA) industry but this year seemed different. We’ve been saying that we’ve entered a new era for a long time, but it’s finally starting to seem real. It feels like 2007 again in a way, when everybody was getting rich and nobody even knew what the heck they were selling. It took years for account reps to finally stop referring to advances as loans and by then it was too late because the ACH loan industry was born.

E-mails like this don’t happen very much anymore:
shotgunning a deal
You know… the ones where the deal would be blatantly shotgunned to multiple companies at once. The major broker shops would “accidentally” CC everyone instead of BCC to let the funders know who was in charge.

That’s not to say that deals don’t get shopped, Some do, but the circumstances have changed. To minimize the risk of being flooded with bad paper, funders ask resellers to put their money where their mouth is. The syndication game has become THE game in town and it’s led to Super ISO networks like the Factor Exchange. A user on the DailyFunder that seems to be intimately familiar with Factor Exchange is quoted as explaining the model like this:

The “mom and pop” ISOs and “Onesy-Twosey” brokers are backed by one giant ISO network and The Factor Exchange assumes half of the risk by syndicating 50% on nearly ever deal…
The massive volume of FEX submissions to lenders gives the ISOs power to negotiate for better rates and terms, One point of submission reaches 15+ lenders, the merchants credit is only pulled once, and the commission is passed straight through to the ISOs because FEX makes their money from participation.
Companies like this empower the smaller brokerages…

movember

Who Did Mo’ Deals in Movember?
Yellowstone Capital broke their single day funding record… TWICE. This actually happened on back to back days. Executive management reported that they funded approximately $3 million in 48 hours.

Who Got Mo’ Money?
Wall Street wizard and business professor, Steven Mandis acquired a stake in Bethesda-based RapidAdvance. The news is all the more interesting with the fact that RapidAdvance is easily one of the top 5 largest players in MCA. Single individuals don’t exactly just walk through door and buy a stake in companies like this. Mandis is taking on a Strategic Advisor position and it’s our guess Rapid is about to enter another major phase of growth.

Who Got Mo’ Likes?
Merchant Cash and Capital’s (MCC) facebook fan page has gotten thousands of Likes since the third week of Movember when they announced their charity campaign. For every new Like until December 7th, MCC is donating $1 to the American Red Cross to help people that were affected by Hurricane Sandy.

Who Got Mo’ Wins?
RapidAdvance was the first team to clinch the playoffs in the MCA industry fantasy football league for charity. Something tells us that Mandis is behind their incredible winning streak.

mustache quote
Who got Mo’ Leads?
You did if you bought leads from either one of our lead advertising partners, Meridian Leads or SmallBusinessLoanRates.com.

Lendio has also been making a splash on the MCA lead scene with Dave Young being a big contributor on DailyFunder. To discuss pricing, he can be reached at dave.young[at]lendio.com

Who lied Mo’?
According to CNN’s statistics, 247 million people in the U.S. went shopping on Black Friday. That’s equal to the entire American population over the age of 14. Something doesn’t smell right with these numbers. It’s our guess that CNN is using Mitt Romney’s polling experts. 😉

But someone else lied just a little bit Mo’. On Movember 26, 2012, PRWeb published a release that claimed ICOA Inc., a small tech company in Rhode Island was acquired by Google for $400 Million. The release turned out to be a hoax as part of a stock pump and dump scheme. Many critics have been left wondering why PRWeb didn’t do anything to verify its authenticity. Considering PRWeb is such a widely used PR service in the MCA space, we can testify that they’ll pretty much publish anything so long as you pay the fee. Some smaller companies use it as part of their SEO campaigns, which explains why there are so many strange looking releases out there that seem to repeat the same keyword in every sentence.

ABC Funding Co Just announced a program that will help small businesses in need of cash by providing these small businesses in need of cash with a special type of financing that will hep them if they are a small business in need of cash. Not exactly New York Times material…

Will Movember be followed by Make-a-lot-of-Doughcember? We’ll find out!

– Mo’chant Processing Resource
https://debanked.com

Traditional MCA Gets a Speed Makeover

October 24, 2012
Article by:

speed clock“How about you fund me first and then you change my merchant account?”

Some account reps will testify that closing a traditional split-funding or lockbox deal can be a bumpy road. The pay-as-you-grow system sounds fantastic over fixed payments until they learn that they have to change their merchant service provider, process sales for two full days, and then wait an extra day for the ACH to arrive in their bank account. The switch could take a few days to several weeks. Have you ever tried to convert MICROS?! A good account rep can keep the customer patient, but that job gets a lot tougher when the fixed daily ACH guys interject right before the contract is signed. We’ll fund you in two days with no processing change required! The customer would have to settle for a fixed daily payment, but that may be secondary to their stress about switching processing before receiving funds. Many things could cross their mind:

  • What happens if the download fails?
  • What if they say I need a new credit card machine?
  • What if my current processor locked my machine with a password? How long will this delay everything?
  • What if I don’t process sales every day? Will I need to wait until I have two full days of activity?
  • What if there are additional underwriting steps after I switch?
  • Are they going to withhold a percentage from my processing before I even get the money?
  • How long is this really going to take? I would prefer if I just had the money now and then I’d feel a lot more comfortable doing the rest.
  • I kind of need the money by tomorrow, I really can’t risk this taking longer than they expect.

So when RapidAdvance announced their new Rapid Funding Program, we thought, “is this really what we think it is?” We had Sean Murray reach out to Mark Cerminaro, the SVP of RapidAdvance and we learned the program is real. They can and will fund merchants prior to changing the merchant account or setting up the lockbox. In the interim, they set up a temporary daily ACH repayment to protect themselves should the conversion experience any hiccups. Murray asked if this was perhaps a response to the fixed ACH payment phenomenon that has exploded in the last year. Cerminaro responded (We paraphrased some of his words in this story), “Variable payments offer benefits. Many merchants would prefer to set up their financing this way. Some of our biggest resellers still focus heavily on split-funding as opposed to the alternatives. We believe this program will help both them and the merchant.”

With the slew of new players in the merchant financing market, is speed just window dressing for an old product? An article in Upstart Business Journal called MCAs old! The fixed payment merchant loan seems to be all the rage these days, leaving some to wonder if traditional MCA is on the decline. Cerminaro says that assertion is false. “We’ve experienced substantial growth this year on our traditional MCA product, on all of our products actually. When big companies like American Express and Amazon came in offering their own Merchant Cash Advance or loan program, it made merchants more comfortable that our product and similar ones to it are mainstream. The New York Times even ran an article that listed Merchant Cash Advance as an acceptable form of financing for small businesses. This is all making Merchant Cash Advance more attractive than it ever was before.”

On 7/28/11, we penned an article that said the Merchant Cash Advance industry was waiting for its big moment. At that time, we believed the merchants weren’t using Merchant Cash Advance financing simply because they just hadn’t heard of it. It was the hottest thing that no one was talking about. Of course the era of anonymity is gone and businesses are rushing to get funding hand over fist. The only question now is whether or not this will continue to drive rates down. Cerminaro alluded that some funders are undercutting so much that they’re forgetting to price in the risk. Other industry insiders feel the same way and the debate over it has become the most active thread on the recently founded, DailyFunder.com forum.

Contact Mark Cerminaro for any questions or clarifications regarding RapidAdvance’s Rapid Funding Program at mcerminaro[at]rapidadvance[dot]com.

– Merchant Processing Resource
https://debanked.com

Is Google Getting Greedy?

October 21, 2012
Article by:

By now, you’ve probably heard of Google’s earnings release blunder when their financial printer published an unfinished report. That version went viral and was clearly not ready for print since it included a placeholder note that said “Pending Larry Quote,” a space that was reserved for a quotable by CEO Larry Page.

Ad revenue was up 16% for the quarter, a 33% surge over last year’s numbers. But is Google getting greedy? We like to search for MCA industry news and in the last couple weeks, we noticed an interesting “glitch” that started to happen. Approximately 1 out of every 15 times (we didn’t run a statistical analysis), zero results show on the page. It doesn’t actually say “no results found,” but rather looks as if the results failed to load. That is of course except for the ads. The ads conveniently become the only clickable options.

This happens often enough that it has become annoying. We’ve experienced it with multiple browsers and three computers. Has anyone else fallen victim to this glitch?

Perhaps it’s psychological, but it seems like this occurs most frequently on business lending related searches, when the revenue-per-click Google earns just happens to be at its highest. Is Google getting greedy?

Silicon Valley’s One Punch Knockout

October 4, 2012
Article by:

This morning I woke up, brushed my teeth, and hopped in my hovercraft to go to the office. As soon as I arrived, I began my routine of playing ping-pong against my co-workers while computers performed the automated tasks I had set for them. Then I went to the gym, came back, and learned that our web portal had generated 12,000 leads, closed 7,000 deals, and funded 5,000 merchants. It was an exhausting day…” — A Senior Account Executive from the year 2013.

technologyWe’ve been offering insight on the 2012 invasion of Silicon Valley into the Merchant Cash Advance (MCA) industry. Excuse us, it’s called the “merchant financing industry” now. California technology companies are bringing money, yes, but most importantly, bringing their treasure trove of technologies to companies that were mostly satisfied with the status quo. But are America’s small businesses ready to do business Silicon Valley style or have MCA companies had it right all along, to operate in the way that small business is most comfortable with?

Two weeks ago, California enacted a law that will allow computerized driverless cars to drive on the road. Cars that drive themselves… this is business as usual in parts of California where everyday things such as gasoline, wires, and paper money don’t exist anymore. There, it is believed that clipping coupons from newspapers is something that the Pilgrims did on the Mayflower. There, applying for a small business loan should be as easy as using your brain waves to telepathically connect with a bank’s computer and having the funds instantly transferred to your bank account. There, is a sense that the rest of the country is just like them…. except it’s not.

If you’ve ever had the pleasure of being an MCA underwriter, you know why antiquated funding companies aren’t going to go quietly into the night. We got to speak with one veteran on condition of anonymity. His words:

We had a guy with good credit, processing $15,000 a month in credit card sales, looking for $20,000. He’d been in business for fourteen years and it seemed like a home run but it took seven weeks to close. He didn’t have a printer or a scanner and he had to drive twenty miles to the nearest Fedex/Kinkos every time he wanted to send us something. On his third trip, his ’94 Corolla broke down and we had to wait a few days until he could find a friend’s car to borrow to send the documents.

These situations do not occur every day, but it is evidence that automation will not singlehandedly knock everyone else out with one punch. There is a technology gap in America. Statisticians point out that 78% of Americans use the Internet, but there is a whole generation that doesn’t trust it with their most sensitive information or have the capabilities to use it to its fullest extent. Would a Silicon Valley takeover of the MCA industry alienate them and leave many of America’s small businesses once again without a shoulder to lean on?

Program or be Programmed

The title of this segment here is the title of a book written by Douglas Rushkoff. An article on CNN commented at length about it and its revelations about the digital age. Americans need to learn all the basics when they’re young. Your PHPs are just as important as your ABCs and 123s. CNN interestingly states:

It’s time Americans begin treating computer code the way we do the alphabet or arithmetic. Code is the stuff that makes computer programs work — the list of commands that tells a word processor, a website, a video game, or an airplane navigation system what to do. That’s all software is: lines of code, written by people.

Just a couple of years ago, I was getting blank stares or worse when I would suggest to colleagues and audiences that they learn code, or else. “Program or be programmed,” became my mantra: If you are not a true user of digital technology, then you are likely being used by digital technology. My suggestion that people learn to program was meant more as a starting point in a bigger argument.

According to Calacanis, each employee who understands how to code is valued at about $500,000 to $1 million toward the total acquisition price. One million dollars just to get someone who learns code.

Read those last two lines? Each employee that understands how to code is worth up to $1 million. Are they seriously teaching people in school that Microsoft Office proficiency is a leg up in the business world?

College graduates that know more than one language have an edge over people that don’t. But speaking Chinese, Spanish, or Arabic won’t get you as far as JavaScript. According to IT World, JavaScript is the most highly ranked programming language in the world as measured by its use and popularity. Learn French and you’ll really enjoy a vacation in Paris. Learn PHP, Python, or Ruby and you just might become the King of France.

code

Am I Already a Dinosaur?

No! Don’t let those 10 year olds with a software empire get you down. Anyone can learn and you need not spend $30,000 a year on college tuition to do it. Codecademy can help complete beginners learn code for free. Get real good at it and you may earn yourself a $50,000 salary increase.

One Punch

Silicon Valley with their exotic computer languages and cars that drive themselves may present a challenge to the MCA industry, but many firms will be able to hang on for a long, long time. Some people still pay by check at the grocery store and yes, many business owners would rather not use online banking, no matter how safe they’re told it is. But there will come a time when being bilingual means being able to write Java and Perl. Oh there will come a time when driving twenty miles to Kinkos in a car that one must drive themselves to fax a document that will never again exist on paper, will be an experience we confuse with the Pilgrims trip on the Mayflower.

Everyone should at least take some basic lessons on self-defense. Silicon Valley is coming out fighting. They might not knock you out, but it couldn’t hurt to have a white belt in JavaScript. Anything to keep you in the ring just a little bit longer.

< ?php echo "- Merchant Processing Resource"; ? > 😉
https://debanked.com

Article condensed 10/8/12

Merchant Cash Advance Community Teams up for Charity

September 27, 2012
Article by:

You may have seen the news story somewhere already: Twelve Members of the Alternative Small Business Lending Community Join Forces for Charity, but you haven’t heard the background of all the companies involved. We’d like to shed some light on the competitors that are battling it out in an epic competition of fantasy football:

Merchant Cash Group
Based in Gainesville, FL, they are a charity league co-founder and direct provider of capital. They recently launched their Fast Funding Equity Program, a unique financial solution to merchants that may not be able to get approved anywhere else.

Competing for: Kiva
Kiva is a non-profit organization with a mission to connect people through lending to alleviate poverty.


Rapid Capital Funding
Based in Miami, FL, they are a direct financing source. They are one of the industry’s fastest growing companies and recently acquired a major credit facility from Veritas Financial Partners.

Competing for: Epilepsy Foundation


Financial Advantage Group
Based in Land O’Lakes, FL, they have been a financial provider since 2004. They have helped fund some big name franchises including individual locations for Sonic, Dunkin’ Donuts, and Quiznos.

Competing for: Society of St. Vincent De Paul
The Society of St. Vincent de Paul offers tangible assistance to those in need on a person-to-person basis.


RapidAdvance
Based in Bethesda, MD, RapidAdvance is one of the oldest and largest MCA firms in the country. They are often called upon to offer expert insight on the industry.

Competing for: Cystic Fibrosis Foundation
This foundation is the world’s leader in the search for a cure for cystic fibrosis.


Sure Payment Solutions
Based in New York City, they made a name for themselves by offering low credit card processing rates to merchants nationwide and expanded on that success by providing businesses with financing. They are well known for their industry blog, Sure Resources.

Competing for: ALS Association
The ALS Association is the only national non-profit organization fighting Lou Gehrig’s Disease on every front.


Meridian Leads
Meridian provides direct marketing programs for financial services companies. They are one of the most used and acclaimed marketing firms in the MCA space.

Competing for: 100 Urban Entrepreneurs
100 Urban Entrepreneurs is dedicated to helping provide a meaningful, long-term economic boost to urban communities throughout the United States by supporting minority entrepreneurship at its earliest stages.


Merchant Cash and Capital
Headquartered in New York City, they have funded over half a billion dollars to small businesses since 2005. They’re heavily involved in the financing of retail and food service franchises. Check out their new website.

Competing for: Gift of Life Bone Marrow Foundation – on behalf of The Silver Project
Gift of Life is a world leader facilitating transplants for children and adults suffering from many life-threatening diseases, among them leukemia and lymphoma.


NVMS, Inc.
A Manassas, VA firm, NVMS offers a full range of inspection services for the Mortgage, Banking, Commercial and Residential Property, Construction and Insurance industries. They’ve established a stellar reputation and are the inspection company of choice for many MCA providers.

Competing for: The Missionaries of our Lady of Divine Mercy
They provide humanitarian assistance to those suffering from poverty


United Capital Source
Based in Long Island, NY, United Capital Source has garnered much attention from their recent spate of seven figure financing deals. They are constantly adding new staff to satisfy the incredible demand for funding from mid-sized businesses.

Competing for: Smile Train
Smile Train partners with local surgeons in developing countries to provide free cleft care for poor children and follow-up services 24/7, 365 days a year.


Swift Capital
From the wonderful city of Wilmington, DE, Swift Capital has made a major splash in the alternative business loan space with low cost working capital. They have helped over 10,000 small businesses nationwide.

Competing for: American Heart Association
This association helps to build healthier lives, free of cardiovascular diseases and stroke.


TakeCharge Capital
TakeCharge Capital has offices in Connecticut, Mississippi, and Florida. They built their reputation on spectacular payment processing services and grew into becoming a national financing provider.

Competing for: Distressed Children & Infants International
DCI’s primary objective is to provide children in rural areas the opportunity to receive an education instead of entering into child labor.


Raharney Capital, LLC
Raharney Capital is a Merchant Cash Advance industry consulting firm based in New York City. They are a charity league co-founder and the operators of this very website, Merchant Processing Resource.

Competing for: Network for Teaching Entrepreneurship
This organization’s mission is to provide programs that inspire young people from low-income communities to stay in school, to recognize business opportunities and to plan for successful futures.


The above companies are participants in the Merchant Cash Advance/ Microloan fantasy football league. Other firms within the same industry are constantly making charitable efforts as well, such as Yellowstone Capital. They recently raised money to help Hatzalah Volunteer Ambulance Corp acquire two ambulances. Noticeable company donors included Strategic Funding Source and Benchmark Merchant Solutions.

All of the mentioned firms are strongly recommending others to donate to the charities they are representing. In addition, any company or person that would like to contribute to the competition’s prize donation can do so by contacting sean@raharneycapital.com or heather@merchantcashgroup.com. We are not accepting contributions to individual charities, only to the prize donation that will be given to the winner’s charity. $5,850 has already been pledged to the prize as of the publication of this story.

– Merchant Processing Resource
https://debanked.com
New and improved New York City office location coming soon!
1375 Broadway, 6th Floor, New York, NY 10018

Donate to one of the represented charities today!

charity


Who else is doing fantasy football for charity? The St. Louis Cardinals in 2013

8 Advances Are Better Than 1

September 11, 2012
Article by:

Things just got interesting. Your merchant processing $20,000 a month got approved for $26,000 and it was hard fought. Bad credit and some other issues would normally have forced this deal to go the starter route, but not this time. This time you can reflect back on the past few weeks of sweet talking the underwriter and know that it’s starting to pay off. Maybe it was the fact that you obnoxiously concluded every e-mail to him or her with a <3 or 🙂 just to make them feel extra special even if it was in response to a deal of yours they moronically declined.

I understand why you had to decline my client with 720 credit. We’ll get the next one! <3 :-)

And now this time you’re chalking up a tally on the closer board for a deal that shouldn’t have gotten done…that is until your client claims to have received a contract for $50,000 from another source. “There’s no way that can be true,” you tell them while rolling your eyes in frustration. This always happens at the finish line. Someone comes in and shouts out wild figures just to steal their attention away for a minute. But what if there really was a company offering 250% of processing volume to merchants who teeter on the subprime/starter threshold?

Sure there are ACH funders out there who will step in and say “based on their gross sales we might be able to give this merchant 500% of their processing volume!” and the like, but very few people are doing this from a split processing perspective.

We’ve been speaking with Heather Francis at Merchant Cash Group (MCG) and they plan to formally announce the details of their Fast Funding Equity program in the next couple of weeks. Without going into all qualifying parameters merchants must meet to be eligible, we’ve learned that these advances will be disbursed in 8 fixed monthly installments rather than the entire lump sum upfront. And that’s the catch. Under this program the merchant might be contracted for $50,000 but only receive a deposit for $6,000 today. However, there would be no future “renewal agreements” to negotiate or sign. Additional funds would be sprinkled into the merchant’s bank account on a near constant basis of every 6 weeks.

MCG might not win the deal every time with this program but they’re going to give a lot of account reps a run for their money. We all know the pitch of verbally promising additional funds in 3-6 months from the date of the initial advance, which is based mainly on hope that the account will perform and that the funder won’t play games. Put that up against 7 renewals in writing and it’s fair to say we’ve got a good match on our hands. There are some other special incentives for MCG account reps on the Fast Funding Equity program that are being leaked on the DailyFunder Forum.

———————————

G-Day

g-dayToday was G-Day in the Merchant Cash Advance arena. GoDaddy.com’s servers were taken down singlehandedly by a jerk (let’s be real here) in the hacker group known as Anonymous. But this time we couldn’t all point and laugh like when it happened to Sony, Yahoo, or LinkedIn. No, this time thousands of MCA agents, underwriters, and staffers wondered why they stopped receiving e-mails after 2pm EST. This time Internet leads stopped coming in, internal databases stopped responding, and websites stopped loading. This time we learned that almost everyone uses GoDaddy for something no matter how much they brag about their systems and technology.

We didn’t take a poll of which companies were affected (we couldn’t because our e-mail was down!), but we did participate in the mass hysteria with several other people that were affected. As this very website went down around 2pm today, we lost contact with our database and e-mail servers. One ISO reported that their website, e-mail, and even their VOIP phones were down (You can have GoDaddy phones?). Another reported that their system was so connected to their GoDaddy servers that they couldn’t even print, scan, or fax! If you’re not a fan of Mondays, today was certainly a good day to make up an excuse to leave early. With systems crashing nationwide, chances are your stapler may not have been stapling right and your boss would have had no choice but to send you home.

Strangely, we have run into the hacker group Anonymous before. Back when they hacked Sony in 2011, they sent a 5 page blistering explanation of why they did it to the U.S. Federal Government. They included a link to our site on page 4 to an area that is now deprecated. That area outlined the basics of PCI compliance. For a week, our analytics showed that most of our web traffic originated from the Department of Homeland Security, Department of Justice, and the FBI. Boy, that was fun. Read that report and see our citation below:

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Who To Beat in 2012

How’s your month going?” we asked. “Pretty slow, but that’s because it’s August,” said a lot of companies we spoke to. August is typically a slow month in the world of MCA. Account reps go on vacation, small business owners hit the beach, and America subconsciously puts everything on the back burner until after Labor Day. That was quite the opposite for 2 New York based MCA firms, United Capital Source and YellowStone Capital, both of whom reportedly broke single month funding records.

According to YellowStone Capital’s posts on LinkedIn, they funded $11,125,000 in August alone. With that, they gave a special thanks to RapidAdvance, GBR Funding, The Business Backer, Max Advance, On Deck Capital, Promac and Snap Advances.

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Add This To Your Data Points!

Companies that actively work to gain Facebook fans and Twitter followers are 20% less likely to be delinquent on their Merchant Cash Advance. Seriously. Kabbage, a company we mention in blurbs every so often operates independently from the rest of the industry by targeting e-bay sellers, independent Amazon stores, and social media retailers. Some people feel that they are not a serious challenger to the status quo and that their tactics, methods, and headlines are merely shock value fodder for the rest of us to laugh at while we all rant and rave about ACH deals being the hottest thing since Square. The founder of twitter (Jack Dorsey) started Square and it has completely disrupted the payments market that quite frankly was used to disruptions until Dorsey turned everything upside down. We believe Kabbage is a company everyone should keep an eye on.

On another note, our favorite part of Kabbage’s recent press release is actually the level of interest banks are expressing in their business model.

While the firm said it is open to establishing alliances with credit unions, banks have expressed more interest in seeing how they can leverage the technology platform to serve its customers.
-Kabbage

Fresh off our rant about John Tozzi’s recent article in BusinessWeek that concluded Wells Fargo was essentially evil for being involved with MCA companies, we’ve become suddenly self-conscious of what journalists might think. Little do they know that America’s big banks have been joined at the hip with the MCA industry for a while now. Banks are still lending to small businesses, we’re just all doing it on their behalves. TRUTH!

– Merchant Processing Resource
https://debanked.com

Why You Need FundersCloud – An Independent Review

August 29, 2012
Article by:

Picture this:

You get up in the morning, take a shower, brush your teeth, and hop on to your computer. 73 new e-mails are waiting in your inbox. Ugh! Some of them are saying “Hey buddy, I got this deal that I think you might want to co-fund. Give me a call later and I’ll try to give you a breakdown.” Half of the time when you call these guys back, they’re busy, have already found a participant, or the deal is way too risky for you to be interested in. Fortunately, you don’t really have to deal with this hassle ever since you joined FundersCloud. You close Outlook, log in to the Cloud and check out the menu of fresh deals that have been posted to the site. You read them aloud to yourself as you scroll down the list. “15k in monthly credit card sales, 40k gross, 720 credit, in business 3 years, ooo.. and it’s a restaurant! $10,000 advance for $13,700… I like… I like… oh and $7,000 has already been raised.” You click ‘Bid’, type in $3,000, and click ‘Bid’ again to finalize. That’s it. You’re done. Once the agent closes the deal, your $3,000 is automatically withdrawn, along with the amounts from the other participants to fund the merchant the $10,000. Satisfied, you walk into the kitchen to make toast…

And that’s what FundersCloud has done. Whether you are an independent agent, an ISO, or a funder, deal syndication is now as easy as:

Wake up -> Log on -> Bid only on deals you like -> Make toast

FundersCloud is not the competition. They’re the turbo boost button to the marketplace that already exists. This Cloud doesn’t threaten or replace your existing cloud, system, database, or CRM but rather complements it, integrates with it, and adds even more value to what you already have.

toastFundersCloud makes funding quicker, smarter, more efficient, and incredibly transparent. This isn’t a paid advertisement. In fact we spent a few weeks on the phone with the FundersCloud team to come up with our own independent assessment. “How does this work? Who reviews this data? How can people trust you?” and so on… We’re actually thankful their team is still accepting our phone calls after our barrage of questioning and requests for details.

The reason we believe FundersCloud is the future of syndication is because it allows people to continue syndicating with funders and people they already trust.

Huh?!

Allow us to explain using a fictional example:
Funder 123 encourages friends, agents, and funders to participate in funding certain deals. ISO ABC likes to syndicate some of those deals but not all of them. So the owners of ISO ABC wait and hope that Funder 123 will call them sometimes with a deal that they like. Sometimes they hate the deal. Sometimes they like it. Other times, they play so much phone tag that they miss out on the opportunity. The process takes phone calls, emails, and time, time, time. Not to mention that Funder 123 may make several of these calls to other people to join in on the participation as well.

In a perfect world, ISO ABC would automatically be notified that Funder 123 has approved a deal and is seeking participants. The key factors like credit score, processing volume, batch frequency, gross sales, and other pertinent information would be immediately available. The ISO could then click a button if they wanted to participate and the rest of the process would all be automated. This perfect world exists because this is the FundersCloud model.

Ohhh yea! And it gets better
An agent is tired of submitting his/her deals to 5 funders at once, hoping that one of them will approve it. The funders are tired of the agent doing that too. Because the agent is forced to maximize the odds of approval, there is really no alternative solution than to continue operating this way. FundersCloud resolves the mess.

Hypothetical Agent DEF uploads their deal to the Cloud and selects one company from the vast array of Deal Controllers to verify and underwrite the file. Deal Controllers are typically existing funding providers, companies that have the ability to pay commissions, collect funds back from the merchants, and track the activity. Perhaps Agent DEF’s deal does not accept credit cards but does more than $10,000 a month in gross revenue, something that a lot of companies like to look at now. So Agent DEF selects a funder as the Deal Controller in the Cloud. The underwriters at that funder are then able to access the deal through the Cloud and underwrite it. If the file meets their standards, they Verify it. The funder can then choose to fund 100% of the deal themselves or pledge to fund anywhere from 1% to 99% of it and put the remaining percentage of the approved funding terms up for auction on the Cloud.

The key details of the deal are then immediately posted and viewable to all members of the Cloud. Thousands of people will now see that a funder has verified this deal and is willing to fund part of it. If you trust that funder’s judgment, have participated with them before, or just love funding anything you can get your hands on, you can opt to participate in the deal with them. You’re not flying blind because the credit score, processing volume, gross sales volume, time in business, type of business, and batch count are all there for you to see. Cloud members can’t steal deals because any information that could be used to identify the merchant is not visible.

So why is this better? You’re only submitting your deal to one Deal Controller (funder) through the Cloud, which then allows thousands of agents, ISOs, and funders to participate if the Deal Controller chooses to fund none of it or less than 100% of it. With this kind of system, why the hell would any agent continue to send out their deal to multiple funders and then wait a week to hear back from all of them? The merchant’s credit would get hit 5 times, one of those funders might steal the deal for themselves, and at the end of the day, only 5 people are looking at it. Wouldn’t you rather let one funder Verify your deal and then give thousands of companies and agents the chance to fund it? Seriously…

If the Deal Controller is verifying the deal and can see the full file, what’s to stop them from stealing it?
A contract, a zero-tolerance policy, and a reminder that it’s up to you to choose your Deal Controller. If there are two choices in the Cloud to Verify your deal and one is XYZ Funder and the other is someone you know very well, you can pick the company you like. Many other people may trust XYZ Funder but if you don’t know who they are, then you need not select them. Besides, if a Deal Controller is caught stealing a deal from the agent through the Cloud, they will be banned. The industry is competitive and even though there are many safeguards already in place, FundersCloud will not tolerate anyone who tries to pervert the system.

Is this process difficult for the agents?
We must admit that when it was all first explained to us, some of the terms went over our head. That’s mainly due to the fact that for all the evolution within the Merchant Cash Advance industry, many things are still kind of old-fashioned. For all the systems, databases, and clouds floating around out there now, too much time is spent e-mailing, calling, and meeting up for lunch to discuss the details that we must then go back and enter into these systems, databases, and clouds. Once you sit down and play around in FundersCloud for yourself, you’ll kick yourself for not developing this on your own or curse the Merchant Cash Advance gods for not having introduced this into your life years ago. This process is just as easy for the agent as it is for the other roles.

Agent uploads deal -> Agent chooses Deal Controller -> Deal Controller Verifies Deal -> Cloud members pledge money by placing bids -> funding contract is automatically generated and made available for download to the agent -> Agent closes the deal and uploads signed contract to the
Cloud -> The Cloud automatically pulls the funds from the pledged participants and transfers them to the Deal Controller -> Deal Controller funds the merchant and is responsible for managing the account -> Agent gets paid the commission by the Deal Controller -> Agent makes toast

The deal’s performance is then made available to the involved parties through the Cloud in real time. And since the Deal Controller is obligated to manage the deal on the Agent’s behalf, the Agent retains full control of the deal on renewals. Similarly, participants are given the option to join in on renewals or new participants can be brought in altogether. Many things can happen, but all of them lead to more funding, faster funding, and a system that’s more transparent for all the parties involved.

Your own internal cloud, system, database, or CRM is probably doing wonders for data management within your company. So why resist technology in other areas? FundersCloud isn’t a concept, it’s live. Deals are already being posted, funded, and tracked. Which means, even if you’re skeptical or have a thousand more questions, you need to sign up (it’s FREE) and see this for yourself. We’ve kept tabs on a lot of events in the Merchant Cash Advance industry, and this is one of those moments where we need to pause, join the Cloud, and make toast. Because the toughest part of getting a deal funded in the future, will be deciding if you want White, Rye, or Whole Wheat afterwards.

The FundersCloud Website


– deBanked
https://debanked.com

Note: This article was originally drafted in late April but was on hold while FundersCloud made some key upgrades. We apologize if we left out any of the new cool features.

The Funders of Summer

August 2, 2012
Article by:

What’s new? Who funded? What happened? Merchant Processing Resource will try to give you a glimpse into the Merchant Cash Advance (MCA) universe:

We all know salespeople love to fund, but underwriters?!! This banner hangs on the wall of the underwriting department at mid-sized MCA firm, Rapid Capital Funding:
rapid capital funding banner


Holy Moses Batman! $10 Million in a month?! Yellowstone Capital is reporting a new personal monthly funding record of $10,245,000.
batman yellow


There has been an influx of really creative instructional/promotional videos about MCA lately. Cartoons are really “in” right now:


PayPal white labeled a Merchant Cash Advance program in the U.K.

Will the mega banks be next?


It feels like 2006 all over again says First Annapolis Consulting in a recent article:

This seems to be the same bullish sentiment that surrounded the industry in 2006, when there was a constant influx of new MCA providers into the industry and what appeared to be unlimited financial sources. What might be different now is the experience accumulated in the industry during the recession. In the last few years, and as a result of the mounting losses that the industry suffered during the economic crisis, MCA players have implemented more conservative risk management practices and procedures.

Underwriters industrywide are also reporting that stacking, splitting, double funding, and fake statements are on the rise. It certainly brings back some nostalgia for veterans and not the good kind. A screenshot of a current ad on craigslist that is directed at bad apple merchants:

novelty bank statements


A new chapter opened for Merchant Cash Advance (This is soooo last month but a great read if you missed it).

http://greensheet.com/emagazine.php?issue_number=120602&story_id=3088


Is the loan shortage a banking problem or a merchant problem? Ami Kassar makes the case in his New York Times column.


Where are the leads? I need the leads. Can you tell me where the leads are?” We literally get asked daily where to get leads from. We recommend:

http://SmallBusinessLoanRates.com
http://meridianleads.com

By the way… for every company that says cold calling doesn’t work, there’s a company getting rich doing just that. Same goes for SEO, mailers, e-mail blasts, PPC, and so. Marketing is an art form. Just because it doesn’t work for you, doesn’t mean it doesn’t work period. Keep doing what you’re doing. Too many ISOs/agents/marketing directors abandon campaigns after 30-60 days. Practice makes perfect!


Have you abandoned social media? We ask this question: What looks worse to a prospect?

Not having a business twitter account or having one but failing to tweet at all in the last 8 months?
Not having a business blog or having one but failing to add any new blog posts in over a year?

We didn’t spend much time researching hard data but we would surmise that freshness is a psychological component to a prospect’s shopping experience. If a business blogged regularly on their site up until May, 2011 and then stopped, might a merchant think the entire business itself is abandoned or gone? Is a facebook fan page with 1 post from 8 months ago a positive or negative selling point? WE SAY: If you build it, maintain it. Nothing brings down your presence on the Internet like abandonment. We understand that smaller companies might not have the manpower, time, or creative energy to write informative articles or engage people through social networking, especially when it’s hard to measure the results and value it creates. Consider the value you might actually be losing by projecting to the world that you have given up. It’s like operating a store with a sign out front that says “THIS BUILDING HAS BEEN CONDEMNED” even though you are actually open for business. If WE stopped posting articles for a year, would you still come back several times a month?

abandoned blog

Here are two examples of MCA firms that keep it FRESH!:

http://unitedcapitalsource.com/blog/
http://takechargecapital.com/category/blog/


Don’t you just love MCA? We do! Visit our site again soon.

– Merchant Processing Resource
https://debanked.com

Why LinkedIn is King

June 9, 2012
Article by:

This may be risky…but we’re doubling down on LinkedIn. The Los Angeles Times will disagree with us, since they recently embraced the radical view that LinkedIn is a big joke. Sure, LinkedIn recently got hacked and that’s a major security issue they’ll need to deal with, but for the haters that brag they haven’t logged into their accounts in years, they probably missed the point of this social media site. LinkedIn isn’t Facebook. They aren’t even competitors. If you want to share your funny photos and write witty updates about how you hate work, please by all means spare the rest of the business world from it. We’ve got some tips for those haters:

  • If you view your job as a 9-5 that’s a burden to living your life, LinkedIn is not for you.
  • If you’re employed in an entry level position and don’t care about climbing the corporate ladder, LinkedIn is not for you.
  • If your goal is to make sure that you never get any kind of individual recognition in your field, LinkedIn is not for you.
  • If you want to avoid talking about your line of work with other like-minded people in a way that can help you grow, LinkedIn is not for you.
  • If you’re a business owner that has no desire to speak to other business owners, LinkedIn is not for you.
  • If you LOL at the thought of networking, in person or online, LinkedIn is not for you.
  • If you want to spam the Internet and submit updates that no one will ever read, go sign up for Google Plus.

LinkedIn isn’t a resumé site or a social network. It’s a cooperative movement to make the private sector vastly more efficient. We’ve heard grumblings from Merchant Cash Advance industry insiders that some of the most popular vBulletin-style forums are pretty much losing their value. The discussion is sporadic, many people hide behind a screen name, and there isn’t any way to validate the information being shared. At best, it’s an anonymous way to spread propaganda. Traditional web forums rely on users to visit the site and once there, go on a scavenger hunt to find new posts and discussions. If there are no new posts, then the time spent going to the forum is nothing more than a waste.

LinkedIn has groups, which are monitored and policed by the group owner much like a forum would be. The stakes are upped because everyone participating can view each other’s business credentials through their profiles. In a traditional web forum, you get situations like this all the time:
business forum

The individual offering to sell leads looks highly suspect. If only there were a way to find out who they really were, where they were located, how long they’ve been in the lead business for, what company they work for, who else they know in the industry, who has publicly recommended them, etc. Even if they had included a real company e-mail address and website in their post, there would still be much more information left to be desired. We believe it’s a lot harder to accomplish anything with anyone you don’t know via the inherent anonymity of traditional web forums. Sure, anyone can fake their credentials on LinkedIn but if you see they’re connected with a former colleague of yours, you can call that old colleague right up and get the scoop. The transparency leads to transactions that get closed faster and both parties can feel more confident in their decisions to do business with a stranger.

Is LinkedIn perfect? No, it’s not. But the results are incredible if you know how to use the site correctly. We’ll put it this way, in the month of May, LinkedIn brought 21% more visitors to our site than what came organically from the Bing search engine. If you LOL at that because Bing is notoriously smaller than Google, just think about how much money you or other people you know are spending on SEO experts to get traffic from search engines. So LOL it up because LinkedIn is free.

Those statistics also don’t count the relationships we’ve built purely through the site itself. You see, it’s not always about making a sale and the numbers of connections you have isn’t what we mean by relationships. You’re a lot better off reading the updates of a C-level executive on the ins and outs of Crowd Funding in a LinkedIn group than you would be from reading a sensationalist, empty opinion about it by the LA Times. Comment intelligently to that exec’s posts and you could find them wanting to connect with you to discuss further and possibly do some kind of business together.

Here are some of the industry groups we recommend you check out:

We cordially invite the haters described in the bullet point list above NOT to join. Not that we should really worry they will. If you actually visit the twitter accounts that the LA Times cites as proof of LinkedIn’s unpopularity, you’ll find that these people spend their time online talking about Kim Kardashian, Lindsay Lohan, and other useless crap. They read like play-by-play diaries of a junior high school girl. Hate away losers, they made twitter just for people like you.

The SEO War Continues

April 4, 2012
Article by:

In the last few weeks, Google dropped a nuclear bomb on the SEO battlefield. Some of you may have noticed but no one really wants to talk about it. Who would want to publicize the fact that their website has plummeted from page 1 to page 25 after investing tens or hundreds of thousands of dollars a year to rank on page 1 for a hot keyword? To be the one holding the bag when the bubble bursts has obvious economical consequences but can also be emotionally damaging. So what happened?

In March, Google de-indexed and banned some of the major subscription-based blog networks and effectively wiped out thousands of backlinks for companies throughout the world. Many in the MCA space have secretly been using these networks to compliment their SEO strategy or worse, be the focal point of it. Blog networks such as BuildMyRank (which has been completely shut down) allowed their subscribers to submit up to ten articles per day. These articles are usually a minimum of 150 words and contain at least 1 link pointing to the subscriber’s website. At the rate of 10 articles per day, a company could build at least 300 highly contextual backlinks per month and easily jump in search results over the competition.

We could write 5 articles today with no problem but task us with 300 and we’ll run out of content after 20 and be mentally exhausted after 50. The quality of the content would likely suffer and there would eventually be a point where it was even too cumbersome to produce gibberish. Some of you may think the article you’re reading now is gibberish. 😉

And so the subscription fees were compounded by the cost of hiring writers internally or outsourcing the work. But when everyone in the industry was doing the same thing, the stakes were upped and MCA companies were forced to use new methods. One blog network subscription turned into four and paying for links and issuing PRWeb press releases became the cost of staying competitive, rather than being the recipe to rank the highest. The subscriptions, the labor, the link purchases, online releases, and other costs to stay visible on the Internet have become increasingly material line items on P&Ls in effort to get to Page 1.

But being listed on page 1 doesn’t guarantee clicks or conversions. In fact, if you’re not in the top 3 for a particular keyword there’s a good chance you won’t experience any clicks at all. According to a study performed by Slingshot SEO, humans just don’t like clicking anything but what’s on top.

While some of the MCA companies that relied heavily on the defunct blog networks have practically disappeared from the search results altogether, those that used them in moderation have fallen out of the top 3. Going from position 1 on page 1 to position 5 on page 1 can be practically the same as going out of business.

merchant cash advance marketingInternet marketing became exponentially popular in the MCA space just in the last twelve months mainly due to the seemingly low cost and reported success by online lead generation companies. For small to mid-sized ISOs, spending $100 on a website with Godaddy and trying to get the site ranked organically just seems so much easier and cost effective than surrendering to the expenses of hiring telemarketers, renting office space, running mailer campaigns, billboards, radio/tv ads, hiring multiple salespeople, and buying leads.

But diversifying your marketing strategy is key. Buy quality leads, mix it up with mailers or calls, or go door to door. Just don’t put all your eggs in one basket. As many companies learned in the last few weeks and more will learn in the ones upcoming as all the SEO penalties finally set in, Google runs the show. They can change their algorithm at any time and there’s nothing anyone can do about it. If you’re going to spend a million dollars for a Times Square billboard, make sure there’s no clause that allows them to move it to the middle of the Pacific Ocean. If you hadn’t figured out why your website is generating less leads lately, we’re sorry to be the bearer of bad news. Your billboard was lost at sea.

Read related article: The SEO War for Merchant Cash Advance

– deBanked
https://debanked.com

Merchant Cash Advance Leads Page Updated

March 8, 2012
Article by:

We have finally cleaned up the HTML of the Merchant Cash Advance leads page. When we transferred servers in August 2011, a lot of the CSS styling and html for certain pages were no longer supported. If you are looking for Merchant Cash Advance leads or interesting in having your company listed, the interface is now more aesthetically pleasing.