New Products in the Merchant Cash Advance Industry

Margins are dropping and competition is increasing. Over 50 NEW cash advance companies were found in a recent Google search. Many of these are small mom and pop are former mortgage brokers who think they can easily get into the business. NOT.

This is bringing a lot of new competition to the market along with merchants shopping around on the Internet for the best factor rate. This means that it is important to get the merchant locked in sooner rather than later to a contract.

NEW PRODUCTS: The American Microloan 1.12 factor is good, but can only be used with merchants with excellent credit.

Other lenders are specializing in refinancing other cash advance deals at a lower factor rate.

A plethora of new cash advance lenders have entered the market. These new lenders are hungry for business and approve a lot of deals that other lenders will not. As a broker it is important to stay on top of these new lenders entering the market and search out these new aggreesive funders to fund deals in this more compettitive environment. Email me for a list of these lenders at mikedoesbooks@yahoo.com.

Wall Street Journal Tightens Business Credit

NEWS FLASH. Credit markets tighten. From the Wall Street Journal front page Tuesday, January 22, 2008. "In particular, start-up and smaller companies are finding that banks are setting higher rates, seeking more collateral or lending smaller amounts." This is actually good for us in the cash advance industry. As traditional banks tighten up small and medium sized businesses will have to turn to alternate sources of fianancing like the merchant cash advance to get funds for cash flow and expansion

Cash Advance Minimums to Rise to $10,000

Tired of chasing all those small deals? Don't worry, you won't have to starting soon. Many of the cash advance "banks" are planning to raise their minimums to $10,000 per month in credit card processing volume in the near future to get deals funded. This means that a lot of the marketing that targets low-end customers will no longer be as viable. It also means that the banks that continue to do deals in the low end, say $2,500-$5,000 a month in credit card processing will get more business. I see cash advance banks that take the smaller deals as developing stronger relationships with ISO's as it makes more sense to do most of your deals with one bank that can handle all your business.