Growing and protecting wealth
Investing in America's SME’s [small to medium sized enterprises]
A merchant cash advance was originally structured as a lump-sum payment to a business in exchange for an agreed-upon percentage of future credit card and/or debit cards sales.The term is now commonly used to describe a variety of small business financing options characterized by short payment terms (generally under 24 months) and small regular payments (typically paid each business day) as opposed to the larger monthly payments and longer payment terms associated with traditional bank loans. The term "merchant cash advance" may be used to describe purchases of future credit card sales receivables or short-term business loans.
Bryant Park Capital released its first-ever “Merchant Cash Advance/Small Business Financing Industry Report” in an effort to gauge the growth of MCAs.
According to the research, the volume of merchant cash advances provided to U.S. SMEs has steadily increased over the last couple years, projected to reach $15.3 billion in 2017, up from an estimated $8.6 billion in 2014.
“Given the tectonic structural shifts in the space, with the traditional large banks retreating from small business lending, merchant cash advance companies and other small business lenders have stepped into this void making capital to small businesses available at great speed and efficiency, albeit at a higher cost of capital, enabling them to do so profitably,” he explained in a statement.
The industry has also developed unique credit underwriting and collections technologies, the report noted. Small businesses can typically repay their MCA via ACH transfers from their bank accounts or repay via a portion of their credit card sales on a periodic basis, which further secures the advance due to the daily repayment agreement.
Lump sum advance
Daily repayment via ACH
6-9 mos term
Fast & Efficient approval process
Industry has approx 50% approval
Proceeds typically used for
Investing in a pool of discounted receivables
Institutional grade underwriting
10% preferred return
$25,000 Minimum investment