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Merchant Cash Advance Provides Quick Cash To Businesses
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merchant cash advance may be the right option for you if your loan application has been turned down by your bank. Small businesses are turning to merchant cash advances for quick cash at a growing rate as more banks become risk-averse in today’s tough economy.
Business owners still need cash, whether the banks are lending or not. A merchant cash advance is not a loan; it’s the sale of a portion of future credit card transactions that your business would ordinarily process. A merchant cash advance doesn’t take the full value of each sale. Instead, a small portion is diverted to repay the cash advance. Because the payback rate is dependent upon your sales volumes, you pay more when your sales are high and less when your sales are low. You won’t get that kind of repayment flexibility with a bank loan.
Merchant cash advances aren’t based on a business’ credit report, so even merchants with bad credit can still get a cash advance. Ninety-five percent of merchants who apply for a merchant cash advance from Rapid Capital Funding are approved. If your business accepts Visa or MasterCard and generates at least $2,500 per month in credit card transactions, you very likely qualify to get the cash you need right now. You can receive as much as 1.5 times your monthly receipts, up to $250,000.
Three out of four merchants take another merchant cash advance when their first advance is fully repaid. This says a lot, especially for small businesses that have been turned down for the working capital they need to keep their doors open. Regardless of why you need cash – to pay bills, expand your business, buy new or replacement equipment, pay taxes – Rapid Capital Funding can put the cash you need in your account in a matter of hours, and you can get back to doing what you do best: running your business.
Contact Rapid Capital Funding today to learn more about merchant cash advances and how they can help your business.
Photo Credit: Striatic, via Flickr
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Merchant Cash Advance May Perk Up Small Business Cash Flow
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merchant cash advance may be the ideal solution for businesses looking for fast cash to help them pay bills and stay solvent in the face of a deepening recession.
According to the latest survey from the National Federation of Independent Businesses, the group’s Index of Small Business Optimism dropped by 1.5 percent to 82.6 from January’s figures. The group’s chief economist says that the first quarter of 2009 is likely to be as bad as the last quarter of 2008.
The lack of capital is forcing some businesses to reduce their workforces, hold off on hiring new help, and reduce salaries to compensate for their higher costs elsewhere. Fewer small business owners reported demand for capital. Others said they were looking for cash to help their businesses survive. In addition, more small business owners were reporting trouble getting loans from their financial institutions because the business’ credit reports have deteriorated.
A merchant cash advance doesn’t rely on good credit; it leverages your future credit card sales to give you the cash you need right now. There is no long waiting period for approval, no credit checks and no collateral. Simply fill out the application. Most advances can be arranged in 72 hours or less.
If your business is registered in the US, accepts Visa or MasterCard and has credit and debit transactions of at least $2,500 per month, you likely qualify for a merchant cash advance.
Contact Rapid Capital Funding today for more information on getting the merchant cash advance you need to keep your business running smoothly.
Photo Credit: Mihai Radu
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Where Small Business Should Save And Spend
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small business owners, allocating limited resources is a major question. In what areas should spending be held constant or increased, and what can be cut? Generally, spending decisions depend upon the type of business you operate, but many experts say that technology spending is a safe bet, even in recessionary times.
Technology tends to reduce operating costs, as long as it makes sense for a business. Check the return on investment carefully on technology spending before you write any checks. You may also consider leasing a system for a year before you buy. The overall cost of leasing may be more expensive, but you’ll quickly be able to tell whether your investment will pay off.
Marketing is also a safe spending area, but don’t assume that marketing is the same as advertising. Newspapers will tell you that print advertising is down, forcing publication costs up. More consumers are turning to the Internet for basic product information, and to help them locate local retailers who sell the products they’re looking for.
Word-of-mouth marketing can also be highly effective at drawing in more business. Look to your existing customer base for ideas that will help you spread the word about your business cost-effectively and where you should concentrate your marketing efforts.
Where should you conserve? Right now, businesses are looking to scale back on rent. This can be a tricky proposition because the success of some businesses, like restaurants, is location-dependent. If your lease contract is due to expire, start talking to your landlord about getting a break in the rent on your location. Check other locales and use this information to justify the reduction you’re looking for.
Unexpected expenses can doom a small business. If you don’t have a plan to handle sudden or unplanned operating costs, consider using a merchant cash advance. A merchant cash advance is an ideal way to get cash into your small business quickly. Most merchant cash advances can be arranged in less than 72 hours, and special financing programs are available for restaurants.
If you’d like more information about a merchant cash advance, contact Rapid Capital Funding today about cash options available for your business.
Photo Credit: Ove Tøpfer
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Bank CEOs Face Congressional Music On Business Loans
If you thought that the CEOs of the major domestic automakers had it bad, hold on tight because the bank CEOs whose firms received a slice of last year’s TARP bailout will be testifying in front of the House Financial Services Committee today. Lawmakers are expected to demand an accounting of what exactly happened to the bailout funds lavished on banks last year, and an explanation for why more of the Fed’s capital isn’t being plowed into
bank loans for businesses and consumers.
Congress has gotten more than an earful from ordinary people who wonder why the banks were not questioned as closely about the estimated $800 billion in TARP grants as automotive CEOs were grilled about their request for $25 billion in federal loans. Lawmakers will be looking for an accounting of how the TARP funds have been spent to date, and want answers about the excessively high bonuses that have been paid to bank executives since the TARP funds were released.
One burning question on the minds of lawmakers is how much of the funding has been offered to businesses and consumers in the form of loans. Among the nearly 400 recipients of the federal funds, only Citigroup has provided any information about how it has spent its TARP funding. Citi’s accounting shows that only about one-third of the money has been made available for loans.
Small businesses have been hit hard by the lack of capital available for operations and expansions in the last year. Nearly five percent of small businesses are now saying that loan availability is the single most important issue facing small businesses today. There is another source of funding for small businesses: a merchant cash advance.
Merchant cash advances are available to any US business that accepts Visa and MasterCard and has at least $2,500 per month in credit card transactions. Merchant cash advances have a limit of $250,000, so you can get the cash you need when you need it.
A merchant cash advance isn’t a loan. It’s a cash advance based on future sales. As your transactions are processed, your advance is repaid, with a small fee. There’s no monthly bill to pay, and 95% of all eligible merchants who request a cash advance get one. There’s no requirement that you have good credit, either.
If you’ve been the bank route and you’re still waiting for your cash, or you’ve been turned down by banks who won’t lend out their cash, don’t face the worst alone. Contact Rapid Capital Funding today!
Photo Credit: Chrisinphilly5448, via Flickr
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Need Access To Cash For Your Small Business?
While the final details of President Obama’s economic stimulus plan have yet to be worked out, some analysts are questioning whether there is anything of value in the plan for small business. Additional loan provisions and increased lending guarantees from the Small Business Administration are in the current package, but some fear that the plan will do little more than create additional governance without addressing the issue of
small business financing.
The potentially expanded powers of the Small Business Administration allow the government to be a buyer in the secondary loan market. While that may seem to stimulate the loan business, many analysts are skeptical about plans to saddle the government with extra debts, likening the new SBA to troubled mortgage guarantors Fannie Mae and Freddie Mac.
Instead, advocates favor extending small business tax relief, a move that is currently absent from the stimulus plan. In the short term, small businesses need cash for operations and longer-term growth. As credit markets tighten, the access to cash has become a major issue for small businesses.
One approach that more business owners are taking is a business cash advance. Based on future credit card sales, a business cash advance supplies access to readily available cash immediately.
Business cash advances aren’t like loans. There is no monthly payment. Instead, businesses can use future credit card sales to fund their current activities. Repayment of the advance occurs as normal credit card transactions for the business are processed. Depending upon average monthly credit card receipts, a business can take up to $250,000 in cash advances.
A business cash advance is a short-term unsecured debt, so there’s no collateral. About 95% of applicants are approved for an advance. To apply for a business cash advance, a business must be registered to operate in the United States, accept Visa or MasterCard, and have total credit sales of $2,500 or more per month.
If you are interested in learning more about how a business cash advance can help your small business, contact Rapid Capital Funding today.
Photo Credit: Kamil Dratwa
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Small Business Owners Short On Optimism In Q4
A recent Gallup survey of small business owners shows that they plan to ride out the recession by cutting both jobs and spending. The quarterly survey, which was conducted in November 2008 and forms the basis of the Wells Fargo/Gallup Small Business Index, indicates that there is little room for optimism among small business owners who are attempting to survive the recession.
The index, which measures small business owners’ overall confidence in their operations, took a substantial plunge in the fourth quarter, falling 35 points to just ten. That mark is the lowest ever recorded by the index since Q3 2003, the first quarter in which the survey was conducted.
Slightly less than one-third of all survey respondents said that their revenues increased in the preceding twelve month period. In contrast, nearly one-half of survey participants experienced a revenue decline in the same period. Respondents also reported a corresponding decline in capital spending, with only one in five respondents reporting an increase in spending on equipment and facilities. Nearly four in ten respondents said that they have restricted their capital expenditures in response to the sour economy, and say that reduced access to capital in the fourth quarter was hurting their business.
More telling, slightly more than one in ten respondents say that they added personnel to their operations in 2008, and nearly three in ten have reduced staff in response to declining revenues.
While major employers make headlines by slashing thousands of jobs at once, the impact of small business is anything but small. According to the US Small Business Administration, nearly all of the nation’s employers are classified as small businesses, and provide slightly more than half of all private-sector jobs.
Some states aren’t waiting for the federal government to finish its stimulus package. They’re looking for ways to support their small business owners. Texas governor Rick Perry is proposing to eliminate state taxes on businesses that register less than $1 million in currently taxable revenue. The move is designed to encourage startup companies, and is seen largely as a win for companies in Texas, who paid nearly $83 million in taxes in 2006, just two percent of the state’s overall tax revenues, yet make up 80 percent of the state’s employing firms.
Photo Credit: Sigurd Decroos
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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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“If the inability to land a bank loan is preventing you from expanding, you’re not alone.”
“Around 65% of domestic banks say they have tightened their lending standards for commercial and industrial loans to small firms over the past three months, according to the July 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices, released in August from the Federal Reserve System. That’s up sharply from the 50% of banks reporting tighter credit in the April edition of the quarterly survey.”
view full story from CNN
Small businesses effected by the current credit crunch still have some options to sustain and grow their businesses. A smart alternative to the conventional bank loan is a business cash advance.
What is a business cash advance?
Business cash advance programs provide your business with upfront money against your future credit card sales from your customers. The business cash advance provider will purchase a small percentage of your future credit card sales, until the payback is completed and giving you the cash advance your business needs today.
Learn More About The Business Cash Advance Program
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