Do You Work in The Merchant Cash Advance Industry?
March 28, 2012It’s a good time to be employed in the Merchant Cash Advance industry. Without doing any formal research on the sweeteners being offered to agents, we frequently see some of the enticing ads:
Share in the Profits!
Get an iPad!
Work with a TRUE DIRECT FUNDER
and so on…
But forget the iPad boys and girls because you can go to the freaking olympics! Someone forwarded us this advertisement from Infinity Capital Funding which apparently is offering anyone that funds over $125,000 in deals through April 30th, two tickets to the 2012 London Olympics, free flights, hotel, $2,000 in cash, and a VIP helicopter tour. We’re inclined to believe that funding 125k will enter you into a raffle to win this package considering medium-sized ISOs could surpass that target with no sweat. Hopefully this plug reaches Infinity and they can clarify this for us.
The last time we saw a sales prize on that scale was in August 2009, when 1st Merchant Funding was offering a free Mini Cooper to any ISO that funded more than $1 million with them in the span of 120 days. Nobody ended up getting the car.
But not everyone in this business is an agent. There are countless underwriters, portfolio managers, secretaries, assistants, callers, bookkeepers, and other individuals that drive this industry day in and day out. It’s important work and we salute you. That doesn’t stop the account managers, sales representatives, and brokers from getting all the attention though. So what IS IT that these brokers do anyway? It depends on who you ask…
This image was created by the staff of Entrust Cash Advance, a veteran Merchant Cash Advance firm in New York City. They’ve been in the industry since 2007 and from what we gather by the image, they’ve got it figured out.
deBanked would like to hear more from companies about any incentives, rewards, and prizes you’re offering. Send any information regarding this to webmaster@merchantprocessingresource.com
– deBanked
https://debanked.com
Banks Conclude Dismal Loan Demand is a Result of Business Wariness
March 23, 2012
Banks are lending again but businesses aren’t taking the money… Surprised? We’re not. According to an article in the Wall Street Journal, “much of [last year’s] loan growth comes from lines of credit, not traditional loans. And instead of tapping available credit to power up plants, open factories and hire people, businesses are waiting.”
All of the statistics used to conclude about what businesses are or aren’t doing relied on data provided by the nation’s largest banks.
- Bank loans to businesses grew 10 percent last year after dropping 19 percent in 2009 and 9 percent in 2010, according to the Federal Reserve.
- Analysts are watching bank loan growth closely because it provides clues about whether companies are preparing to hire.
With the blind assumption that banks are the only institutions that provide financing to small businesses, experts are inferring faulty conclusions.
- Wells Fargo assumes businesses are uneasy about the future.
- JPMorgan reports that businesses just don’t want to use the money.
- Chase Bank believes that small businesses have enough money of their own and don’t need loans.
It seems that yet another one of our predictions is coming to fruition. What the banks conclude is wariness, is a direct contradiction to what is being experienced in the Merchant Cash Advance industry: an incredible, insatiable, all consuming demand for for working capital.
Dear Banks,
Small businesses are more confident than they’ve been in a long time.
Sincerely,
The Merchant Cash Advance Industry and Micro-Loan Providers
Why just yesterday, Yellowstone Capital announced the closing of a $1 million deal for a health care service provider. This is right after they financed a trucking business for $751,000. Millions of dollars are literally being poured into small businesses DAILY. United Capital Source recently finalized $1.25 million for a mid-sized business and these are just a few of the deals we’ve caught wind of. If we ran a story every time a large Merchant Cash Advance deal funded, well there would be so many stories that our web servers would crash. And because these deals are not being closed by Chase, Bank of America, or any other national financial institution, the Federal Reserve, major banks, and Wall Street Journal analysts assume that (a) businesses must not be getting financing and (b) businesses must not want capital.
Both are absolutely false. Prediction: The Wall Street Journal will run the following headline two years from now:
Economy and Small Businesses Experience Phenomenal Growth While Bank Lending is at an All Time Low. Experts Stumped.
Other News: President Obama Proposes New Legislation to Allow Him to Run for a Third Term in Office.
Everybody will know the reason for this except the big banks who will conclude that some kind of miracle has happened.
– deBanked
https://debanked.com
Merchant Cash Advance On Huffington Post / Just Call it a Coupon!
March 16, 2012An article was published by the Huffington Post today that explained the need for Merchant Cash Advance providers. Though some of it was described in an unflattering light, it conveyed some important messages.
- Real business owners explain that banks both big and small are not interested in lending to them
- One woman is quoted as saying: “If I ever write a book on how to open a restaurant, the first chapter is going to be ‘Banks Are Not Your Friends.'”
- A direct funding provider revealed that demand for merchant cash advances increased by 15 percent to 20 percent in 2011 and that 70% of businesses use more than 1 advance.
Our favorite line and perhaps the most important thing you can take away from this article is the quote by the CEO of AmeriMerchant. “[Merchant Cash Advance] is less expensive than [offering] a Groupon for 50 percent off or putting inventory on sale for 30 percent off.” Isn’t it ironic that the Groupon/e-coupon/social coupon concept is today’s business as usual and is at the same time significantly more costly than what the media considers to be expensive financing?
LivingSocial has 60 million members worldwide and they operate much in the same way that Groupon does. Let’s discuss this. According to wikipedia, Groupon’s business model works as follows:
For example, an $80 massage could be purchased by the consumer for $40 through Groupon, and then Groupon and the retailer would split the $40. That is, the retailer gives a massage valued at $80 and gets approximately $20 from Groupon for it (under a 50%/50% split).
So the 50% discount to the consumer is actually a 75% loss of revenue for the business owner. This practice is publicly accepted as fair, practical, and a way to increase your sales. If that’s the case, should’t financing that costs $2,800 to receive $10,000 be considered a bargain? We think so. Expensive is in the eye of the beholder. The media has a funny way of convincing people that a 75% discount is a great deal but financing costs of 28% are astronomical. Not to say that 28% is cheap, but there is only one reason that low rate bank loans even existed in the first place. The SBA is willing to cover up to 90% of the defaults and charge it to the taxpayers. That’s an advantage the rest of the private sector doesn’t get.
We can’t help but think what would be if the Merchant Cash Advance concept was rebranded as a powerful social marketing tool to drive sales. What if a Merchant Cash Advance provider purchased $12,800 of a store’s future sales in exchange for $10,000 today and then mass marketed that business to local consumers through mailing lists, iphone apps, and website ads to drive customers to the store. That would allow the Merchant Cash Advance provider to recoup their purchase as fast as possible and at the same time create viral growth for the business. The technology already exists and businesses are already willing to accept 75% losses. Isn’t it time they all started getting a lot more bang for their buck?
It’s not expensive when it’s spun that way is it? Sayonara Groupon and LivingSocial! Merchant Cash Advance is the sleeping giant at your doorstep.
– deBanked
https://debanked.com
United Capital Source Provides Medium-Sized Business With $1,250,000
March 9, 2012
deBanked (MPR) has learned and confirmed that New York based funding provider, United Capital Source (UCS) has provided financing to a medium-sized business in the amount of $1,250,000. While the parties have requested to keep certain specifics of the arrangement under wraps, the business is involved in the sale and repair of highly specialized equipment, and has operations and headquarters in multiple states.
While it was not structured in the traditional Merchant Cash Advance sense, it is believed to have been set up with fixed payments. UCS has received a lot of attention in the last six months due to the wide variety of clientele they are servicing. With deals ranging from a few thousand dollars to over a million, they are quickly becoming a top choice for any business in need of capital.
MPR has been doing research to quantify the size of the Merchant Cash Advance industry. In a recent article, the term itself was redefined. We’ve known for some time that there were some larger advances/loans being done within the space but not all of them are being publicized. What we’ve discovered is that it is not unusual for deals to reach as high as $2 million. The recent media attention on CNN and FOX is also an acknowledgment that the Merchant Cash Advance concept has penetrated the mainstream and is no longer an alternative, but the standard.
– deBanked
https://debanked.com
Merchant Cash Advance Leads Page Updated
March 8, 2012We 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.
Are You Ready to Ride The Merchant Cash Advance Wave?
February 18, 2012Less than a year after we acknowledged the stunning absence of Merchant Cash Advance financing from the mainstream media, suddenly it’s the only thing being talked about. It took a few years but journalists are finally learning to complete the phrase of banks aren’t lending with, fortunately there are other options. The term Merchant Cash Advance is being thrown around so much that financial institutions that offer different funding programs entirely such as American Express are trying to attach their names to it. They are now trying to rebrand their product as Express Merchant Financing. This isn’t to be confused with a Dallas, TX based company called Express Working Capital which offers Merchant Cash Advances. You can understand why there is so much confusion. Merchant Cash Flow Loans too, which are micro loans based on gross sales are often identified as Merchant Cash Advances even though there is little common ground.
But let’s not fuss over small details because it’s not just the funding companies that are talking about it now, it’s the media.
No matter how well your website is designed or how good your sales people are, it’s important to recognize that small business owners think like normal consumers. According to a 2007 Nielsen Survey, 63% of people’s trust in a company forms from newspaper sources and 56% from television sources. Even though this type of financing has been around since the 1990s, the lack of news coverage has held the industry back. Despite the advancement of social networking and internet background searches, the majority of Americans still have that If it’s on TV, it must be true mentality. Why else would political candidates still be spending billions of dollars on TV commercials to get their message across?
The broad use of Merchant Cash Advance terminology, the recent recognition by the mainstream media, and the march of average Americans into the reseller market is an omen. A wave is coming. Whether some deem the current industry’s size to be $600 million a year or $1 billion is irrelevant. Merchant Cash Advance and similar financing programs have the potential to be a $10 billion market annually, especially since the major banks are retreating from SBA loans.
We suspect that in 2012, particularly the latter half of it will be explosive unlike the entire industry has seen before. Too many small businesses have been waiting on the sidelines since 2008. If the trend of rising employment is correct and a real recovery is underway, then we’ve got all the ingredients for a perfect storm. Confident Business Owners + Fast, Easy Access to Capital = American Recovery.
Call these business loan alternatives whatever you want: Merchant Cash Advances, Merchant Cash Flow Loans, Express Merchant Financing, etc. Just make sure you have a surfboard. A giant wave is coming.
– deBanked
https://debanked.com
The SEO War for ‘Merchant Cash Advance’
February 12, 2012
Let’s admit it, we’re all at war. If you’ve uttered the terms Panda, PageRank, Backlinks, or Organic in the last few months, you know what we’re talking about. We didn’t choose this fight, Google forced it upon us. And so after a long day of phone calls and handshakes about affordable working capital, we return to our homes at night and search the web. Not for information of course, but to find out where our company website pops up when we Google the phrase: Merchant Cash Advance or other relevant terms. Today we ask, is the fighting worth it?
In 2007, back when the industry hadn’t put much thought into the Internet, the #1 search result for Merchant Cash Advance was the blog by David Goldin, the CEO of Amerimerchant. It made sense because it was a self proclaimed “online resource dedicated to the merchant cash advance industry.” There, small business owners and competitors could read about the trials and tribulations of an industry on the verge of explosive growth. It was interesting, it was informative, and best of all, he ranked first without trying.
Nowadays, it’s all commercial. Merchant Cash Advance companies with fat advertising budgets are spending thousands to rank for their favorite keywords, with Merchant Cash Advance still high on that list. The friendly information resource has been replaced by a website that not only crushed the competition in search positioning but seems to publicly brag about it too.
As we write this article, the top 10 Google search results for Merchant Cash Advance are:
1. Merchant Cash in Advance
2. YellowStone Capital
3. Entrust Cash Advance
4. Merchants Capital Access
5. Merchant Resources International
6. American Finance Solutions
7. Nations Advance
8. Bankcard Funding
9. Rapid Capital Funding
10. Paramount Merchant Funding
Do keep in mind that your results may differ slightly depending on your region. Google geographically targets searchers to bring them the most relevant matches.
How much is the #1 spot worth? The market priced it at $75,000 three months ago when MerchantCashinAdvance.com was sold in an online auction for that amount (saved in pdf). So which powerful Merchant Cash Advance company unloaded their precious website? None. The owner of the site was actually an SEO guru looking to make a quick buck. He studied the industry a bit and then within two months ranked a site at the top of Google.
75k might even be considered a steal, as we were actually approached to purchase that website ourselves in August 2011. The exchange was a bit contentious, with them being unwilling to accept less than $200,000 and us making an insulting offer of $100. Perhaps it was jealousy or perhaps it was because we didn’t realize how a Merchant Cash Advance website could be worth so much, but the discussion quickly degraded into name calling and we never spoke again.
How many small businesses are searching for Merchant Cash Advance anyway? According to Google, there are 14,800 searches for it a month. We assume that at least 75% of those are from the companies offering it. You probably Google the phrases several times a day yourself. Admit it!
The real money is in the long tail keywords, since merchants are more likely to personalize their search. Being first for merchant loan for bad credit might be more potent than Merchant Cash Advance. It’s tough to say since deBanked doesn’t really rank for either of those. Then again, we’re an information destination, much like David Goldin’s Blog was/is.
We’re not SEO experts, but we do quite alright with Google ourselves. Without giving away all of them, this is our current placement for just the following keywords:
- Merchant Cash Advance directory: 1, 2
- Largest Merchant Cash Advance companies: 1
- Merchant Cash Advance UCC: 1, 2, 3
- Merchant Cash Advance statistics: 1
- Merchant Cash Advance stats: 1, 2
- Merchant Cash Advance default: 1, 2
- Merchant Cash Advance UCCs: 2, 3, 4, 5
- Merchant Cash Advance laws: 2
- Merchant Cash Advance forums: 2
- Merchant Cash Advance articles: 3
- Merchant Processing: 3
- Merchant Cash Advance Jobs: 8
- Sell your mom for cash: 1 (don’t ask)
MerchantCashinAdvance.com was no different and they claimed to be #1 for over 300 business lending related keywords. A spreadsheet of the analysis they put up during the auction can be found here.
With nothing more than an organic search presence, they claimed to have had the following results:
Month of July for 2011: Received 647 calls & 148 online business lending applications: Funded 81 deals, $26,000.00 profit.
Month of August for 2011: Received 731 calls & 234 online business lending applications: Funded 113 deals, $29,500.00 profit.
Month of September 2011: Received 1026 calls & 276 online business lending applications: Funded 147 deals, $41,750.00 profit.
If that’s the case, then $75,000 was a bargain. That no doubt led to the auction of a similar site just a month later. MerchantCashAdvances.org is currently ranking 51st for Merchant Cash Advance. They claimed to earn $12,500 annually in ad revenue and $200,000 in commissions. The starting bid was $10,000 and although there were many inquiries, it didn’t sell.
That doesn’t mean it wasn’t worth the price. Most Merchant Cash Advance companies are secretly or not-so-secretly investing thousands into SEO campaigns. Black hat SEO is rampant and even the most reputable companies have engaged in it at some point. The underwriting room is the one they show their clients. The sales floor is the one they show their new recruits. But ask where the internet marketing room is, and they’ll claim it doesn’t exist. But it does of course. They’re usually small quarters with no windows that are filled with computers armed with software like ScrapeBox, Article Marketing Robot (AMR), XRumer, and a list of working proxies.
Even the white hats are building backlinks manually and creating endless articles for use on their own company blogs or for services like BuildMyRank. One moderately sized Merchant Cash Advance company in New York City has just as many SEO employees as they do sales representatives. For some, this is just the beginning. It’s not unusual to spend $10,000 – $20,000 a month on pay-per-click campaigns.
The Internet has become a place where the person with the most to spend wins. Because of competition, a paid Google campaign for Merchant Cash Advance keywords can cost $20 per click! We did a phone call with Google and were told that less than 10% of clickthroughs convert into a sale or completed form. If only 1 out of every 10 visitors calls or inquires through the site, that amounts to $200 for a single lead. If only 1 out of every 5 of those leads turn into a closed deal, the acquisition cost is effectively $1,000. That number is awful especially considering commissions and factor rates have been rapidly declining over the last year. And merchants wonder why this financing is more expensive than a bank loan…
It also explains why the practice of closing costs and service fees have survived internal industry scrutiny. Some resellers would be operating in the red without them. Organic traffic is in essence free, that is if you don’t consider the salary or fees you pay your SEO team. Hopefully they don’t overdo it and place your site in the Google sandbox. Until then, the rewards outweigh the risks and every day the industry pushes the envelope a little further in the quest to rank on page 1.
If you can earn $200,000 a year from a website or sell one for $75,000 after two months of work, then there is plenty of room for growth. If the industry was saturated, it wouldn’t be that easy. If your mother is getting into the Merchant Cash Advance business, make sure she knows how to market her website. It’s a war out there.
– deBanked
https://debanked.com
