Merchant Cash Advance Puts You In Control Of Your Cash Flow

Small businesses are hurting. The tight economy has put the squeeze on everyone and everything. Banks won’t lend, customers won’t buy and those who do want to extend the receivables cycle. That leaves the small business owner right in the middle.

Cash flow is what keeps your business alive. You need cash to pay your bills, but how can you get the cash you need when sales are down, your remaining customers are paying late, and banks aren’t lending?

If your business is registered in the US, and accepts Visa or MasterCard, you should consider a merchant cash advance from Rapid Capital Funding. A merchant cash advance gives you the cash you need now.

With a merchant cash advance, getting the funds you need is much easier than it is to ask the bank for a loan. There is no long application process, no weeks or months of waiting while your business suffers. There is no collateral to put up, no guarantees to make, and your credit doesn’t have to be perfect.

Ninety-five percent of the businesses that apply for a merchant cash advance are approved. These are businesses just like yours that need cash now. Each month, as you process credit card transactions, a small percentage of your transaction is used to repay your advance. There are no monthly loan payments. When your transaction volume is up, your advance is repaid quicker; when the transactions slow down, so does your repayment.

Many businesses appreciate the repayment flexibility of the merchant cash advance, and your business may be eligible for an advance that is as much as 1.5 times your monthly average transaction volume. We also have special financing plans for high-volume transaction businesses like restaurants and bars.

Don’t struggle to stay afloat. Contact Rapid Capital Funding for your merchant cash advance today.

Photo Credit: Miguel Saavedra

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Merchant Cash Advance Is An Option For Small Business Owners

Small business owners have limited access to cash these days, due in part to the tight economy and restrictive lending standards. Small Business Administration loan volumes have fallen off sharply because banks are no longer willing to take any risk associated with new business ventures.

Small business owners are running out of options to secure cash. Some entrepreneurs are even looking at their 401(k) accounts as a source for the cash they desperately need. While 401(k) loans are billed as a great option, they come with some disadvantages, too.

First, you can withdraw up to 50% of your vested balance, with a cap of $50,000. The interest rates on the loans are currently low – 1 percent over prime – and the fees are minimal. That all sounds good.

Unfortunately, when you take the funds from your 401(k) plan, you damage the fund’s ability to accrue additional gains on the principal - the smaller the principal, the smaller the return. You may be paying back the loan with interest, but it’s very likely that the investment income those funds can generate is greater than the interest you’ll be paying back. Your 401(k) money is basically out of commission until it’s returned.

Also, if you start skipping payments on your 401(k) loan (a likelihood you should at least consider if you’re short on cash), after a 90-day hiatus on payments, your withdrawal converts to an unqualified distribution and will be subject to income taxes and a penalty of 10 percent. That means you’ll need to come up with extra payments when you file your taxes in the year you take the distribution.

A better approach might be to take a merchant cash advance from Rapid Capital Funding. A merchant cash advance allows you to get the cash you need now and pay it back with future credit card sales by your business. If your business is registered in the US, accepts Visa or MasterCard and takes in at least $2,500 in credit and debit receipts each month, you likely qualify for a merchant cash advance.

Merchant cash advances aren’t like loans. There are no monthly payments to make and the process of obtaining a cash advance is much simpler and shorter than applying for a loan. There is no collateral to put up, and we don’t require personal guarantees. Simply fill out the application form and if you qualify (95% of applicants do), you can have the cash you need in hours or days, rather than weeks or months.

Contact Rapid Capital Funding today to see if you qualify for a merchant cash advance.

Photo Credit: Mike Licht

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California Feels The Pinch Of Unemployment

According to the California State Economic Development Department, unemployment in the Golden State rose above 10 percent for the first time in at least 25 years. January figures show that state’s jobless rate to be 10.1 percent, and revised December unemployment figures show an unemployment rate of 8.7 percent for the last month of 2008.

Last year, California had an unemployment rate of 6.1 percent. Nationally, January’s unemployment data showed that 7.6 percent of the nation’s eligible workers were idle. The EDD said that sharp declines in certain industries, including finance, construction, information technology and retailing were responsible for the jump in unemployment. Currently, more than 1.8 million Californians are out of work, more than double the number of job seekers in January 2008.

Small business is responsible for about 70 percent of all new job creation, but according to statistics from the California Manufacturing and Technology Association, the private sector has created only 15% of the new jobs in the state since 2001.

To help stimulate the state’s economy, the California legislature has passed new tax credits for homebuyers, as well as new tax incentives for corporations. The state stimulus package also includes incentives designed to encourage small businesses to hire more workers.

For some small businesses, simply surviving the recession is critical. To do that, some business owners have turned to alternative financing options that provide the cash they need when they need it. Merchant cash advances are becoming popular with retailers and small business owners. A cash advance is based on a business’s average monthly credit and debit card transactions and can provide cash in as little as 72 hours.

A business cash advance leverages future credit card sales, allowing the business to get funding immediately, and pay it back as the transactions come in. Businesses can receive as much as 1.5 times their normal monthly sales, and pay back the advance at the rate at which the transactions come in. When business is good, the advance is paid back faster. When business is slow, the advance is paid back at a more relaxed rate.

The flexibility of a merchant cash advance is one of its most attractive features. The advance payment doesn’t rely on a merchant’s credit, so good credit or bad, you may still qualify for a merchant cash advance. For more information on how a merchant cash advance can help your business, contact Rapid Capital Funding today!

Photo Credit: Billy Alexander

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Receivables Can Make All The Difference For Small Business

Small business has a more difficult time weathering an extended receivable cycle than a large business does. Right now, many other businesses are surviving the economic down turn by delaying payments to vendors and creditors. For small business owners, getting paid is critical because it means the difference between staying in business and closing up shop.

To avoid turning collections into a full-time job, some small business owners are looking for reasonable options that will bolster their cash flow and help them stay in business at the same time. The solution for some small businesses is a merchant cash advance.

If your business accepts Visa or MasterCard, is based in the US and generates at least $2,500 per month in credit and debit card receipts, your business likely qualifies for a merchant cash advance from Rapid Capital Funding. A merchant cash advance puts the cash you need in your hands, often within 72 hours. You won’t find that kind of responsiveness from banks and other lenders.

A merchant cash advance simply leverages your future credit card sales today. As credit and debit card transactions are made, a small portion of the sale goes to pay back your merchant cash advance. There are no monthly loan bills to pay, and you get the cash you need up front.

With a merchant cash advance from Rapid Capital Funding, you don’t need to tell us what you plan to do with the money. You don’t need to show us reams of financial statements. You don’t even need to have perfect credit. We can help most merchants that meet our basic lending standards. In fact, 95% of merchants who apply for a merchant cash advance will qualify.

Don’t let slow receivables burn your small business. Contact Rapid Capital Funding today for help.

Photo Credit: Billy Alexander

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Fiorina Says That Small Businesses Will Drive Economic Recovery

For owners looking for small business capital opportunities in the freshly inked stimulus package, there’s not much of real value. According to Carly Fiorina, former CEO of Hewlett-Packard, small business – not government spending – will drive the economic recovery in the US. Fiorina was delivering the keynote address at the International Franchise Association meeting yesterday.

Fiorina expressed concern that the stimulus plan applies Depression-era corrections to a 21st century problem, and that the spending package won’t address the real needs of the sectors that will actually deliver the economic recovery.

Analysts have indicated that the stimulus plan isn’t by itself friendly to small business. While it does extend some tax credits and increase some caps for depreciation and other business expenses, it doesn’t do much to help small businesses expand, create jobs or spur sales.

Cash flow is a primary consideration of small businesses. Many franchise operations need a steady source of income to make payroll, buy supplies and pay bills. Other small businesses need ready access to credit, so that they can make purchases and start projects on short notice.

For these businesses, bank loans may be out of the question. Banks have restricted lending, even to businesses that have excellent credit and payment histories. These restrictions make it tough on small businesses to land contracts and deliver services in a sour economy.

A merchant cash advance may be the ideal solution for certain businesses. If your US-based business accepts Visa or MasterCard and registers credit sales of as little as $2,500 per month, your business could be eligible for a merchant cash advance.

For more information about a merchant cash advance, or to see if your business qualifies, don’t wait! Contact Rapid Capital Funding today!

Photo Credit: Asif Akbar

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Small Business Tax Cuts Would Do More Than Stimulus Plan

SurePayroll, an online payroll service, released the results of a recent survey of small business owners and their impression of the Troubled Assets Relief Program (TARP). Nearly 75 percent of small business owners disagreed with the government’s approach to bailing out the banks as a way to jump-start the economy. Only three percent of respondents felt that the TARP plan would be effective.

The survey showed that small business owners aren’t that keen on a large spending plan, either. Only eleven percent though that massive government spending would improve the economy.

What do small business owners think will work? Nearly fifty percent of survey respondents say that tax cuts would be a better way to get the economy moving in a positive direction again. To date, the TARP plan has not resulted in increased lending to businesses or consumers, primarily because lenders can’t find buyers for new loans on the secondary credit market. Without loan buyers, increased lending isn’t sustainable and banks don’t want to service their loans themselves.

Despite the fact that banks are now flush with cash, they’re not lending it out to consumers or small businesses. This puts small business owners in a bad position. Small businesses have few options when it comes to getting the cash they need to continue or expand their operations.

Some business owners have discovered that a merchant cash advance is the quickest way to get cash fast. A merchant cash advance enables businesses of any size to use future credit card sales to secure cash. A business cash advance isn’t a loan. Credit card transactions repay the advance as they come in, so there’s no monthly bill to pay, and you get the money from your credit card sales up front. You can even request an advance of up to 1.5 times your average monthly credit card sales figures.

Rapid Capital Funding is a trusted leader in merchant cash advances. Don’t wait for the bailout to trickle down to your business. Get the cash you need now with a merchant cash advance from Rapid Capital Funding.

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Small Business Index Shows Confidence Eroded In January

According to the National Federation of Independent Businesses, small business owners’ confidence in the economy and in their businesses dropped to the second-lowest level ever recorded by the NFIB in the organization’s 35-year history. The NFIB’s Small Business Optimism Index fell to 84.1, from 85.2 in December 2008.

The organization remains hopeful that signs of recovery will begin to appear in the second half of 2009, but acknowledges that any recovery is unlikely to begin through the second quarter of the year. In addition to the glum outlook for businesses, small business owners reported a significant decline in average employment in January, though capital expenditures remained steady in January, after falling five points in December. Nearly 60 percent of respondents reported a drop in profits in January.

The NFIB says that the number of deferred expenditure plans rose two points, but reports that owners aren’t making big plans to build inventories, and 20 percent fewer businesses expect to see their sales rise, an overall drop of 2 points. The outlook for expected credit conditions was largely negative, dropping fourteen percent from January. Four percent of respondents indicated that credit and financing are their single most important problems right now. Thirteen percent of respondents say that loans are harder to get now than in the past, and demand for loans is at a low.

The drop in loans could signal tough times ahead for some small businesses. Combined with tightened lending restrictions, some small businesses that would normally borrow to get through rough spots aren’t able to get the operating capital they need to stay afloat.

For some businesses, an alternative to a loan is a merchant cash advance. A merchant cash advance can put the cash you need in your hands right away, without the weeks or sometimes months of waiting that can accompany a traditional loan. Even businesses with less-than-perfect credit can qualify.

A merchant cash advance isn’t like a loan. Instead, it’s a cash advance on your future Visa and MasterCard credit transactions. Your cash advance is repaid as you take in new transactions. Nothing could be easier! Most advances are delivered in less than seven business days, and you can request an advance of up to 1.5 times your normal monthly credit card receipts. There are no restrictions on how the cash is used, and 95% of all applicants are approved for the advance.

If you need cash to keep your business moving, turn to a name you can trust: Rapid Capital Funding.

Source: NFIB
Photo Credit: Ben Earwicker

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Thinking About Financing A New Business?

Financing a new business is a tough call to make, regardless of what the economy is doing. In a down market, however, the stakes are even higher. A poor economy reduces your options when it comes to getting your business off the ground and keeping it there. Some would-be entrepreneurs put off starting a small business altogether.

The number one challenge facing would-be entrepreneurs is small business financing. If you don’t have investors, and your personal savings isn’t large enough to front the cost of startup and to cover your own expenses while you build your business income, starting a business may not be in the cards.

There are several options for financing, but loans can be difficult to get if your credit is not pristine and your business plan has some holes in it. The Small Business Administration will back loans for both capital equipment and other startup costs. The loans are administered through private lenders and you’ll need to meet the lending standards in place at the time you apply.

Legislation under consideration in Congress right now would enable the Small Business Administration to lend directly to borrowers if no private lender will accept the loan application. In addition, the legislation would permit the SBA to increase the amount of its guarantee from 85% to 95%. Even with these incentives, private lenders who are risk-averse are unlikely to part with the capital an applicant may ask for.

You may also attempt to secure a personal loan from the bank or another private lending source. If you’re applying to a private lender, this route will be difficult to manage if your credit isn’t perfect. Personal lending volumes have dropped significantly, since many consumers aren’t interested in taking on more personal debt and few lenders are interested in writing new loans.

For some new companies, a business cash advance is a likely option. Like a credit card cash advance, a business cash advance is relatively easy to get. Business cash advances are usually based on the credit card sales of a business. Unlike a loan, there are few papers to file, and most businesses that request a business cash advance are approved.

To apply for a business cash advance, the business must be located in the United States, must accept Visa or MasterCard and must have credit card transaction volumes of at least $2,500 per month. Using a business cash advance, the lender provides payment up-front for future credit card transactions. As the transactions are made, the lender is repaid. Repayment includes a small percentage of the borrower’s daily credit card receipts.

The business cash advance is an unsecured loan. There is no collateral to put up, and the business simply conducts itself as it would under ordinary circumstances. Repayment occurs as the credit card transactions are processed, so there’s no monthly loan payment to make. Businesses can receive advances of up to 1.5 times their monthly credit card sales volumes, so you can get the emergency cash you need when you need it. There are no restrictions on what the cash advances can be used for, and advances can usually be arranged in a week or less.

If you would like more information about how a business cash advance can work in your favor, contact Rapid Capital Funding today.

Photo Credit: Dani Simmonds

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Trouble for the Credit Unions

In January of this past year (2008), there was a report at Research Central and CIO Insight online stating that 186 different financial institutions (credit unions included) had been victimized by online fraud.  Additionally, attacks on online credit unions had accounted for 45% of all monthly activity during 2007.  Conversely, attacks against national banks had decreased by nearly 44% during the same time frame.  Speculation has arisen that with a weakened economy that the credit unions are now easy targets for hackers and scam artists.

The above reports appeared to be just the tip of the iceberg for the problems that the nation’s credit unions have been experiencing throughout 2008, or possibly a harbinger of worse issues to come.  It became obvious that the financial sector in the US was infected by the evidences of numerous credit losses and write-downs.  Back in August, a report was released by the Wall Street Journal that five of the biggest credit unions in the US have lost considerably on mortgage-backed securities in the residential real estate sector.  Entire equity bases were literally wiped out in the process.

This indicates that this housing market distress has been spreading even into the financial sectors were there is less risk involved.  Gerald Hanweck, who is a finance professor at George Mason University and is a visiting scholar at the FDIC, has studied the banking industry for quite some time now and feels that the situation has been growing more serious throughout 2008.

In addition to the above, the federal regulator who oversees the US credit unions claims that the losses will most likely reverse themselves once the mortgage markets become more stable, and once these institutions become more adequately capitalized.  However, there are some outside observers who are very concerned that these credit unions have underestimated how deeply the problem is running within the mortgage industry.

According to Hanweck, this is a very serious situation and it isn’t getting any better.  Hanweck believes that the five credit unions have sufficient funding available to handle a deeper downturn in the situation, but he continually worries that added risk could lead to a more serious run on funds with one or all of them.  Since 1990, the total assets of US credit unions have been consistently increasing from just over $200 billion to just under $800 billion as of the end of the second quarter of 2008.

Credit unions are member-owned, not-for-profit cooperatives (organizations) that lend money and take deposits like regular banks.  The credit unions have become key players in the mortgage industry, and their problems are focused on the so-called “corporate” credit unions. Unlike the standard credit unions, the corporate entities do not deal directly with the consumer.  However, they do provide financing and investment services to the regular credit unions who do deal directly with consumers.

According to several federal regulatory filings, the five corporate credit unions that are showing the largest mortgage-related losses are:

Constitution Corporate Federal Credit Union
Members United Corporate Federal Credit Union
Southwest Corporate Federal Credit Union
U.S. Central Federal Credit Union
Western Corporate Federal Credit Union

As of the end of May, 2008 they had reported nearly $5.7 billion in “unrealized” losses which occur when the current market value of any security drops, whether it has been sold or not.

The fact that these credit unions are experiencing grave financial strain, even though they are the most conservatively operated institutions in the financial sector, indicates that no financial sector is immune from this mortgage meltdown malady.  It has also caused far-reaching damage throughout the commercial bank sector and the Wall Street financial services.  Mark-downs of over $300 billion in connection with the mortgage industry dilemma have already taken place as well.

As a result of regular credit unions being too small to engage in more sophisticated investing, the corporate credit union came into being for the purpose of serving these smaller entities.  A portion of the assets/funds of these regular credit unions gets placed with one of the corporate ones who in turn will invest the money.  Assets of the 28 corporate credit unions (which are owned by the member credit unions) total roughly $90 billion.  US Central provides the member credit unions with investment services in addition to being a service provider for the corporate ones.

Credit unions, like banks, are insured by the Federal Government for up to $100,000 per account and up to $250,000 for retirement type accounts.  Seven of these regular credit unions failed in 2007, and as of August (2008), nine have failed so far.  Since these regular credit unions have funds deposited with the corporate ones, a financial failure at that level would equate to losses for the regular credit unions involved, as well as losses for the depositors/members of them.  Additionally, it has been 13 years since a corporate credit union has failed, but eventually, the regular credit unions involved with them did recover their funds.

From a historical standpoint, 25 years ago in 1983, Congress passed legislation to increase the United States’ contribution amount to the International Monetary Fund.  There was also a conference of 13,000 government financial officials and international bankers that was held in Washington, D.C. during Reagan’s Presidency.  It was the joint annual meeting of the IMF and World Bank wherein they addressed problems with the US dollar and interest rates.  Of equal importance, these issues shared the stage with concerns over the deadlock of IMF funds.

As of early December, 2008 a two-tiered plan to help those institutions battered by investments in the lending and mortgage sectors has been introduced by the federal agency that oversees the operations of US credit unions.  As of this coming January, 2009 the NCUA (National Credit Union Administration) will be awarded a $41.5 billion “shot in the arm” that was approved by Congress in September (2008) to stimulate some liquidity for corporate credit unions that are experiencing continually mounting losses on securities tied to mortgages and other types of home lending.

Additionally, this plan also provides another $2 billion for retail credit unions so they can cut their interest rates on mortgages that are currently held by homeowners who are struggling to make their payments on time.  In addition to this, the funding has been structured in the form of repayable loans.  No matter what the future holds, or what happens with the long-term viability of these troubled corporate credit unions, the NCUA is counting on the retail credit unions having a serious interest in (and committed to) preserving the entire credit union sector through these difficult financial times.

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Should the US government Bail out the auto industry?

The us auto industry has been on its back for several years now.  The situation has accelerated with the most recent credit meltdown and all three are running to capital hill seeking a bailout.  It seems like under the current circumstances this request should be met with a resounding YES.  If any of you paid attention last week to the latest jobless claims, over 500k for the month!

Well what are we missing?  The worst financial crisis since the great depression, staggering unemployment, ECT.  ECT.  ECT……  Then why do the big three have to get down on their hands and knees and beg?  Did AIG have to beg?  Did Citigroup?  The list goes on and on.  The largest manufacturing industry in our nation that represents over 4 million US jobs and our government might let them go bankrupt.

There must be a better way.  If I where in charge here is what I would do;

I would give them a small short term bridge loan so that they could survive over the next couple months and meet obligations.  During this period I would require them to hire bankruptcy consultants and put together a plan for a packaged bankruptcy.  The government would provide the financing to pull them out of bankruptcy.  This would do a couple things.

It would allow the automakers to restructure with their creditors, unions, employees, and most importantly get rid of all the legacy liabilities that have been haunting them for years.
Give consumer the peace of mind that the big three will survive and come back stronger.  This way we still buy cars from them because we know the government supports the industry and its survival.  All warranties will be honored.

Once this is accomplished the entire industry will be poised for restructuring and will continue to thrive for many years.

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