Merchant Cash Advance: Step-by-Step
Getting a merchant cash advance can be beneficial for your business in many ways. This business funding method makes it possible for small business owners to have the funds to expand, renovate, increase working capital, etc. But before you can actually get your hands on up to $500,000 in unsecured funds, there are a few steps that you must take. Click on the steps listed below for a detailed explanation.
Small Business News # 2
New Plans for Small Business Lending
President Obama has announced plans to increase the limit of the Small Business Administration’s express Loans. The current limit for these loans is $350,000; Obama would like to increase this limit to $1 million.
The SBA Express program features “an accelerated turnaround time for SBA review.” Through this program, responses to applications are given within 36 hours.
Unemployment Rate Falls Slightly
Today, the Bureau of Labor Statistics released its Employment Situation Summary for January, 2010. This report features employment information, household survey data, establishment survey data, as well as changes to the employment situation text and tables, revisions to establishment survey data and adjustments to population estimates for the household survey.
Key Points
· Unemployment rate fell from 10.0 to 9.7 percent.
· Nonfarm payroll employment was “essentially unchanged.”
· Employment fell in construction, transportation and warehousing.
· Temporary help services and retail trade added jobs.
Is Social Media Affecting your Credit?
According to Miranda Marquit, a blogger for allbusiness.com, credit companies are beginning to look at your social media profiles to determine your credit worthiness. “In their quest to identify creditworthy customers, some are tapping into the information you and your friends reveal in the virtual stratosphere,” wrote Erica Sandberg, for creditcards.com. Read the full stories here and here.
A Brief Overview of Business and Jobs
For the Month of January
- Businesses that have fewer than 50 employees lost 12,000 workers.
- Companies in the 50 to 499 employee range added a net of 9,000 jobs.
These statistics paint a picture of an economy that still suffers from some affects of the recession but is also en route to recovery. Small business owners can take various avenues towards raising money to build up their businesses, hire new workers and be part of an economic recovery.
- Obama’s recent proposals, including a $5,000 per worker hiring tax credit
- View an outline of proposed tax credits for small business owners here.
- Business Cash Advance
- Get up to $500,000 in unsecured business funds and use the cash however you choose.
Celebrating African Americans in Business
In celebration of Black History Month, Merchant Resources International would like to recognize the various accomplishments of African Americans in business, of the past and the present. Below is a list of firsts in business, some you may know and others may be new to you.
The First African American…
To Hold a Patent
1821 – Thomas L. Jennings, for the “dry scouring” cleaning process.
Owned-and-Operated Newspaper
1827 – Freedom’s Journal
Owned and Operated College
1863 – Wilberforce College, Ohio
Woman to Hold a Patent
1885 – Sarah E. Goode for the cabinet bed.
Woman to Found and Become President of a Bank
1903 – Maggie L. Walker, St. Luke Penny Savings Bank (since 1930 the Consolidated Bank & Trust Company)
Millionaire
1910 – Madam C.J. Walker – Owner of Madam C.J. Walker Manufacturing Company.
Graduate of Harvard Business School
1969 – Lillian Lincoln
Owners of a Radio Station
1971 – Hal Jackson and Percy Sutton, WLIB – New York
Owners of a Major Metropolitan Newspaper
1981 – Robert C. and Nancy Hicks – The Oakland Tribune
Billionaire
2001 – Robert L. Johnson – Founder of Black Entertainment Television
Merchant Cash Advance: A Glossary of Terms
If you’re a small business owner who’s looking into receiving a merchant cash advance for the first time, you may hear some words, phrases and/or terms that you’ve never heard before. Use this glossary to build up your merchant cash advance vocabulary before searching for a business cash advance, or refer back to this glossary should you every come across a new term, during your merchant cash advance search.
Click on the terms below to view their definitions.
Small Business Poll: Have You Been Able to Secure Business Funds?
We want to find out how small business owners really feel, so we’ve created a poll to find out more about small business owners’ ability to secure business funds.
Have you been able to secure business funds since the beginning of the recession in early 2008?
a. Yes, I got a bank loan, it was easy!
b. Yes, I got a bank loan, but it wasn’t easy.
c. Yes, I used an alternative to bank loan and it was easy!
d. Yes, I used an alternative to a bank loan, but it wasn’t easy.
e. No, I tried to get a bank loan and I was unsuccessful.
f. No, I tried to get an alternative to a bank loan and I was unsuccessful.
g. I have not attempted to get business funding since the beginning of the recession.
Click here to vote and don’t forget to check back for the results.
Also, check back for the next poll focusing on the issues that real small business owners face and feel free to suggest a poll question.
Alternative Financing Becomes Popular
Bank loans have been particularly hard to come by since the beginning of the recession. In the thick of the “Great Recession” alternative business funding methods became very popular as small business owners were forced to look into other business financing options. But now, even though the economy has begun to improve, alternative funding methods are still very popular, as bank lending has yet to bounce back and many business publications are educating their readers on alternatives to the traditional business loan.
Today, the Wall Street Journal features an article focusing on asset-based lending. “Because asset-based lenders focus on collateral, rather than credit-worthiness, they do deals that more traditional lenders shy away from. Borrowers put up equipment, inventory, accounts-receivable and other liquid assets in exchange for the money,” wrote Kyle Stock. Stock also explains that these lenders have the legal right to seize assets, should the borrower miss payments.
An article in the New York Times last week, addresses a business funding method called purchase-order financing. With this method, the lender pays a factory to manufacture goods and pays for the goods to be shipped. After the lender is paid for the merchandise and his services, he then hands over the rest of the money to the customer (the business that borrowed the money).
The merchant cash advance of course, is another alternative business funding method. Small business owners can get up to $500,000 for their businesses through this method. However, unlike asset-based lending, the merchant cash advance is unsecured, and merchant cash advance providers will not seize borrowers’ property if their sales are slow. Also, instead of taking the money for purchases from a business and then allocating it back to the business, minus the borrowed amount and service fees, merchant cash advance providers only take a small percentage of a borrower’s daily credit card sales, allowing them to receive the revenue from their customers’ purchases as they are made.
Small Business Owners Need Money
According to special inspector general, Neil Barofsky, the financial bailout is failing to reignite bank lending to U.S. businesses. In an article for BNET, a website that “provides working professionals with the tools, advice, and insight they need to succeed in today’s workplace, “lain Sherter explains this situation and how the “Unlocking Credit for Small Businesses” program, which was announced by the Treasury Department in March 2009, had yet to disburse any funds, as of December 31.
Though the availability of business funds may have drastically decreased over the past couple of years, the need for those funds has not; and as the economy begins to recovery, the U.S. is still filled with small business owners who need cash to expand their businesses, hire new workers, save jobs and save their businesses.
Have you been able to get cash for your business? If so, how?
Protecting Your Personal Assets
“A few years ago, you took out a $300,000 loan for your business because you anticipated continued growth. But the economy soon fell apart, and so did your business. You can no longer pay back the loan, and the lender has filed a lawsuit against your company and you personally, threatening to seize your home, car, and cash in the bank.”
The above is an excerpt from Tom Taulli’s article on BusinessWeek.com. The article, titled, “Five Ways to Protect Your Personal Assets” offers small business owners advice on keeping creditors from getting their hands on their personal property, should they default on a loan.
This information, of course, is very helpful and possibly essential today, as the recession has caused many businesses with existing loans to go under. But a valuable piece of information that many small business owners may not know, is there is a way to get business cash without putting your personal assets at risk in the first place.
The merchant cash advance is not loan, but it is an excellent alternative to bank loans that allows small business owners to get up to $500,000 in unsecured business funds, meaning there is no collateral required.
In order to protect personal assets, Taulli advises small business owners to:
- Inventory everything.
- Research exemptions and protective entities.
- Avoid personal guarantees.
- Be wary of the contracts they sign.
- Buy insurance.
While these steps may be imperative for borrowers of bank small business loans, small business owners who take advantage of merchant cash advances already have their personal assets protected. If a merchant’s business closes down due to natural means (fraud is not involved), his/her personal property will not be confiscated.
If you are interested in getting an unsecured merchant cash advance, get a free online quote from MRI now.
Using Social Media for Your Business
We’ve offered tips on using social media for your business before, in posts such as, “Using Social Networking Effectively for Your Business” and “Where to Find Resources for Your Business Online”. But as using social media for your business has become so important over the past few years, it’s important that as small business owners, you fully understand your social media options and how you can use them to the benefit of your business.
Below are a few articles explaining how small business owners can use social media.
- 30 Tips for Using Social Media in Your Business
- An Executive Guide to Social Media
- Social Media for Business: The Do’s and Don’ts of Sharing
You may also want to participate in social media webinars for an overview of specific social media sites, where you can ask questions and get answers. eRocketFuel, a social media agency, offers free 30 minute webinars for Facebook, Twitter, LinkedIn and YouTube.
