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Merchant Cash Advance Resource Wants Your Articles

August 23, 2011

The Merchant Cash Advance Resource invites industry veterans to share their knowledge by submitting articles to our site. While you may not self promote yourself or your firm within the body itself, your article will allow a linkback to your site in addition to being personally credited. You will promote the well being of the community and in turn be taking advantage of the exposure it will bring you. Our site recently began averaging over 100 hits per day.

Articles must pertain to Merchant Cash Advance or relevant small business lending environment. We thank you all for your work!

MCA Funding Statistics for New York in October 2010

August 23, 2011

Article by: Sean Murray

From New York Secretary of State from 10/1/2010 through 10/31/2010

Number of deals funded:

AdvanceMe 18

Merchant Cash and Capital 15

First Funds 12

Merchants Capital Access 11

Capital For Merchants 9

1st Merchant Funding 7

Max Advance 4

Strategic Funding Source 4

AmeriMerchant 2

Snap Advances 2

EZ Business Cash Advance 2

Business Financial Services 1

Greystone Business Resource 1

RapidAdvance 1 (don’t always file UCCs)

American Finance Solutions 1

Bankcard Funding 1

Merchant Capital Source 0

GRP Funding 0 (don’t always file UCCs)

The Business Backer 0

Merchant Cash Group 0

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Making Sure Our Educators are Educated

August 23, 2011

Article by: Sean Murray

Posted on November 15, 2010 at 8:58 PM

No, I am not referring to public school teachers. Many representatives in the Merchant Cash Advance(MCA) industry often times encounter a daunting challenge, taking on a potential client’s preconceived notions that a MCA is bad.

A MCA might be bad if the financial product simply does not suit the customer’s needs. In that case it’s a bad fit, but it is not a reflection of the product itself. The issue is when a business is unwilling to consider if the product could be a fit for them at all.

Over the past few years, any small business looking for capital has at one point spoken with a reseller of MCAs. A large factor in those that applied for funding and those that didn’t is a result of the sales person they spoke to. Given that this industry was largely unheard of until 2008, resellers were out there making a first impression on behalf of us all. In a sense, they were not only selling the product but also educating small business owners about what MCAs were all about.

That could very well mean that a small business owner’s 3 minute conversation with a 1st day cold caller back in 2007 is the sole basis for which their negative perception of MCAs was formed. The industry was so young that many resellers themselves could barely grasp the concept of the product they were promoting.

In 2010 there is no excuse. One salesman by the name of Tim, reported to us that a potential auto repair shop client he was courting hung up on him mid-sentence when he had suggested “Merchant Cash Adv..” The client called back and apologized for the hang up but stated he had no interest in a MCA. Which lead to inevitable question…Why? The business owner explained that he had been approached by another salesman two days before and was made aware of the fact that “MCAs are for restaurants with bad credit that use credit card machines.”

This was a very big problem indeed given that he owned an auto repair business, had a 720 FICO score, and used POS software on his computer with a MagTek swiping unit attached. In one sentence, the previous salesman had unintentionally inflicted serious damage. Tim had a lot of work to do.

Although restricted by some funding sources, Auto Repair is the 2nd most funded business model. Credit requirements are continuously on the rise and a few funders offer significantly discounted pricing for FICOs above 700. If the salesman can’t see beyond terminal based credit card transactions, well then we have a lot more educating to do.

It’s easy for a MCA reseller to hire ten mortgage brokers and instruct them to call restaurants accepting credit cards, that have been declined for a business loan. They may have success and yet they leave a mess of chaos and confusion in their wake. Any business that isn’t interested, doesn’t need capital now, or doesn’t qualify at this time, may find themselves in a different position later on. If we don’t generate the sale today, but educate the masses of business owners on the way, we will find ourselves with more clients in the future.

All the mailers, door to door appointments, leads, cold calls, and advertising become less effective when the potential client base has been inundated with incorrect information and stereotypes. If we truly want to grow the industry and provide capital to the small businesses that need it, we need the front lines to be knowledgeable. Nothing is worse than a clothing store owner holding your brochure in their hand and never making that phone call because of a misconception about how this product works.

Explain it properly and everybody wins. 😀

-The Merchant Cash Advance Resource

www.merchantprocessingresource.com

The Current Members of NAMAA

August 23, 2011

Article by: Sean Murray

NAMAA is the North American Merchant Advance Association. From their website: The North American Merchant Advance Association (NAMAA) is a not-for-profit trade association representing organizations in the United States and Canada that are in the business of providing working capital advance products based on credit, debit or other card and electronic payment-related revenue streams to small and mid-sized businesses (currently referred to as a “Merchant Cash Advance”). NAMAA provides guidance and helps to influence and shape the merchant cash advance industry through leadership, education and the sharing of information.

Currently their members include:

American Finance Solutions
AmeriMerchant
Business Financial Services
Business Loan Options
Capital For Merchants
GRP
Greystone Business Resources
Merchant Cash and Capital
Merchant Cash Group
Merchants Money Tree
Principis Capital
RapidAdvancee

There are a few newcomers to the group it seems and strangely, AdvanceMe, the largest funding source of them all is nowhere to be found. How is it that the oldest and most dominant player in the industry is not a part of it?

Rumors and evidence (I’ve seen it!) shows that NAMAA also has an interactive shared database of defaulted clients, fraudulent applications, and other protectionary services. This information would certainly be to AdvanceMe’s benefit. Does anyone know why they’re not part of it?

How Not to Grow Your Merchant Cash Advance Business

August 23, 2011

Article by: Sean Murray

Advertising and marketing are tricky in any industry. The Merchant Cash Advance space has certainly experienced its fair share of trial and error over the past several years. What works for one company, doesn’t for another.

Many argue that there are no virtually no barriers to entry and this causes problematic issues in competition. Some representatives don’t know what they’re selling, how to sell it, or what can and can’t be said when they’re selling it. There are so many fly by night resellers, that states are running out of LLCs to issue. “Merchant funding capital advance now approved accredited finance business source solutions, LLC” is the going fast! Better Organize it now.

For ones that make it, they have the good leads.

Blake: These are the new leads. These are the Glengarry leads. And to you they’re gold, and you don’t get them. Why? Because to give them to you would be throwing them away. They’re for closers.

But there is good way to not grow your Merchant Cash Advance business and that is to be so desperate, that you buy actual piles of garbage. These leads are obtained through sources that advertise in this manner:

You can find stuff like these in forums, along with a shady hotmail address, no website and a promise of ‘top quality.’ If your business model is to buy leads, then make sure to have your Ch. 11 papers handy before you purchase these TOP QUALITY LEADS!!!

Also watch out for ‘try before you buy’ schemes: Get 5 trial leads for $50. if you like them, you can purchase a minimum of 100 at a time for a cost of $20 per lead. There are no refunds when you buy them. The 5 trial leads are real. The $2,000 bulk purchase is a flaming pile of crap.

Shelley Levene: The leads are weak.

Hope that helps. I would love to share more insight right now but a payday loan company with a predictive dialer is calling my phone and I’m eager to talk to someone in India who can provide a vague description of the product and have my information sold to 5 companies who swear I had completed a contact form online for car insurance because that’s what their lead sheet says.

-The Merchant Cash Advance Resource

https://debanked.com/merchantcashadvanceresource.htm

Keep a Watchful Eye on Your Merchants Until New Years

August 23, 2011

Article by: Sean Murray

If you work in the Merchant Cash Advance(MCA) business, November and December should be your favorite months. Holiday sales translate into enormous surges in both cash advance and processing residuals. If you don’t know what residuals are or don’t have them included in your compensation structure then OOPS! (Your employer won’t like us too much).

A struggling ISO can rise out of the red on the coattails of their merchants and have a very black friday themselves. But proceed with caution for clients that have an outstanding MCA balance. The surge in sales can be all too tempting to keep for themselves. :mad:

A photo we took at a store on Black Friday

Did your retail store client process a big fat ZERO on Black Friday? Did that liquor store do less business in the days leading up to Thanksgiving than in prior weeks? If so, the merchant may be hijacking your future receivables and with that, your largest residual paycheck of the year.

It is not uncommon for stores to hire temporary workers and open additional lanes and cash registers to accommodate increased foot traffic. It is also the time when their secret backup credit card machine they never told you about rears its ugly head. While we can sympathize with a business for needing extra terminals, we don’t condone the use of ones that breach their MCA contracts.

What to do? If you haven’t already, now is the time to call your clients to find out if they need additional equipment. It can’t hurt to make the first move before they act on their own and intentionally or unintentionally use another merchant processing service.

Additionally, some small business owners may try to process all sales in excess of their monthly average through an alternate machine. So a mall retail store processing $10,000 month on average continues to process that same $10,000 in November and December, leaving you completely unsuspecting that an additional $30,000 was processed elsewhere. Monitor the retail, food service, and liquor store accounts on a daily basis from now until New Years.

Treat your clients right and work with them to ensure they don’t miss a beat. Out of receipt paper? Ship them extra rolls! Processing an unusually large sale? Get the signed invoice or receipt to ensure funds are not held.

Veterans in the Merchant Cash Advance business have come to expect this last month and half of the year to be the most rewarding. But make sure the merchants are equipped to handle the sales, monitor their activity, and keep an eye on them. Happy Year End.