The Truth about Merchant Advance Live Transfer Leads (Part 1)

What are Merchant Advances?

merchant advance live transfer leads

merchant advance live transfer leads

A merchant cash advance is a lump payment to a company in exchange for a percentage of its future credit card/debit card sales. The company authorizes the merchant advance service to take a percentage of its credit/debit card income directly from the processing company that clears the credit card payments. Deductions will automatically stop as soon as the obligation has been met.

Who Needs Merchant Advance Live Transfer Leads?

Merchant advance companies are most often utilized by retail companies that can’t qualify for traditional business loans. A merchant advance can be costly compared with interest on a standard bank loan, with interest ranging from 10% to 100%. Merchant advances should not be confused with loans.  Rather, they are a sale of a percentage of future credit/debit card sales. Because of this, many merchant advance companies claim that they are not bound by usury laws that normally limit interest percentage rates.

What to Pitch to Merchant Advance Live Transfer Leads

merchant advance live transfer leads

merchant advance live transfer leads

Despite the relatively high cost of merchant advances, their structure has many attractive advantages over the structure of conventional business loans offered by standard banking institutions. Most notably, payments to the merchant advance service change directly with the merchant’s present sales volumes.  This gives the borrowing merchant much more flexibility with which to manage their cash flow.  This is particularly important during slow seasons or periods of hardship. Further, the relative ease, facility and overall speed of the application process, as well as the reduced security position associated with merchant advances are huge pluses. A hypothetical scenario goes as follows: A retailer sells $30,000 of a portion of its future credit card sales for an immediate $25,000 lump sum from a merchant advance company. The merchant advance company then collects its portion (often between 5-10%) from each credit/debit card sale until the entire sum of $30,000 is collected.

The Merchant Advance Live Transfer Leads Repayment Options

merchant advance live transfer leads

merchant advance live transfer leads

In general, there are three different repayment methods for the borrowing business:

  1. The Split Withholding: Here, the credit card processor automatically splits the credit/debit card sales between the borrowing business and the merchant advance company per the agreed portion (often between 10% and 25%). For the most part, this is the most common and preferred method of for both the borrower and lender since it is functionally seamless.
  2. The Lock Box or Trust Bank Account Withholding: In this setup all of the borrowing business’s credit/debit card sales are deposited into an account controlled by the merchant advance company.  Next, then the agreed upon amount is forwarded onto the merchant advance company through an ACH, EFT or wire transfer. In general, this is the least preferred method because it involves a 1 day delay in the firm receiving their portion of the proceeds of their credit/debit card sales.
  3. The ACH Withholding: This is when the merchant advance company receives the credit/debit card processing information and then deducts its portion of the proceeds directly from the borrowing business’s checking account through ACH.

The Truth about Merchant Advance Live Transfer Leads (Part 2)

The second part of “The Truth about Merchant Advance Live Transfer Leads” will explore the process of generating Merchant Advance Live Transfer Leads.

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