Jul
26
2010
Guidelines To Follow For Merchant Cash Advance Companies
Author: Rodney RabahWith the economy teetering on the ropes after the sub prime home loan meltdown, merchants are finding it more difficult than ever before to qualify for a conventional bank loan. A merchant cash advance may be a great solution. A speedy turn-around time, reasonable cash advance amounts of up to $250,000, and a flexible repayment plan are all reasons for traveling this alternate direction for the working capital your business needs.
Still, a entrepreneur would do well to review more than just the working capital they can attain. The North American Merchant Advance Association (NAMAA) has rules of best business practices which they condone for merchant cash advance companies. If the agent offering you a business cash advance does not align with these rules, it is most likely best to look somewhere else. The practices are as follows:
-Provide lucid disclosure of fees – NAMAA does not approve of closing costs as part of the application process of merchant advances but urges that any such fees be transparently explained and disclosed. The total repayment figure should be entirely explained and figured out before finalizing the agreement.
-Provide lucid disclosure of liability – Basically, merchant advances are not considered loans; instead they are looked at as a purchase of future credit and debit card receipts. As such, the entrepreneur can be held personally in debt for any monies not returned if the small business owner opts to violate the agreement.
-Be mindful of a entrepreneur’s business cash flow – A normal contract involves that the small business owner repays a determined portion of credit and debit card transactions on a daily basis.
-Sales materials disclosure – All marketing materials should make it clear that the contract is one of factoring, not a loan.
-Keep tabs on your Sales Agents/Brokers – Merchant advance providers should make sure that their sales agents or brokers are righteously representing the product.
-Adequate repayment of outstanding Merchant Cash Advance Balances – if a entrepreneur opts to take an additional merchant advance with a new provider the new lender should immediately pay off the previous remainder rather than trusting the small business owner to cover the balance.
Dating back to early 2008 Daniel Samoohi has aided 1000’s of business owners find reputable lenders in order to compare quotes for a merchant cash advance. By making lenders compete with each other, Daniel also helps merchants find great deals for credit card factoring.







