The Green Sheet Online Edition
June 25, 2012 • Issue 12:06:02
Cash advance enters B2B world
Most small and midsize business (SMB) owners would readily admit working capital is extremely tight these days. For businesses that don't accept credit cards, the prospects of a merchant cash advance have, for the most part, been off limits - until now.
The new B2B Cash Advance from Merchant Cash and Capital LLC was created specifically to offer business-to-business (B2B) relief to SMBs seeking capital for equipment, growth and any number of other business needs.
"MCC's business is all about providing flexible capital for those who qualify, and the B2B Cash Advance program will now make financing available to thousands of merchants that previously couldn't qualify simply because they either didn't accept credit cards or they didn't have enough receipts to qualify, even though they made great candidates for financing," said MCC President and Chief Executive Officer Stephen Sheinbaum.
Typically, merchant cash advance programs are based on credit card sales, and a fixed percentage of daily card sales is collected to pay back the advance. B2B Cash Advance is based on total monthly revenue, and MCC collects a fixed percentage of future bank deposits. According to MCC, qualifying merchants can receive funding of up to 100 percent of monthly revenue, and it has streamlined the underwriting process to minimize paperwork.
"With this unique, one-of-a-kind program, we can easily fit these merchants under our financing umbrella," Sheinbaum said. Through its expanded funding umbrella, MCC plans to target wholesalers; manufacturers; suppliers; insurers; contractors; heating, air conditioning and ventilation services; landscapers; and health care providers; among others.
Because funding is expected to remain a challenge for SMBs, Sheinbaum said MCC will continue to design progressive programs to provide SMBs with access to working capital. MCC reportedly has funded more than $400 million to over 12,000 customers since first opening in 2005. The company said its reseller program is based on a revenue-sharing model and offers ISOs extensive training and ongoing support.
"Generally, the ISOs will receive a percentage of the amount of funding advanced to merchants," said Seth Broman, MCC Vice President of Business Development/ISO Relations. "Separately, we also work with ISOs to market their existing merchants with cash advance offers." MCC can prescreen an ISO's database to qualify merchants and then notify merchants directly to inform them of their approval amounts. This approach has been extremely effective in driving ISO revenue, Broman added.
Merchant Cash and Capital LLC
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