WIXLIB

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1How has the troubledeconomy affected the MCAindustry?Many people ask how the state of today’s economy hasimpacted the Merchant Cash Advance industry. Who isapplying for cash advances? How have the underwritingguidelines changed over the past few months? Just like anyindustry, difficult times continue to create new challengesand require continued flexibility and creativity on part of aMerchant Cash Advance (MCA) company.In the past, small business owners, specificallyrestaurateurs with troubled credit histories, accounted for alarge portion of cash advance portfolios. Becausetraditional financing options have tightened up theirguidelines, the landscape of the MCA industry is now filledwith a mixture of business types. Funding sources havealso seen an increase in the number of submissions, aswell as credit quality.Merchants that may have been approved for cashadvances even a year ago - may today be consideredautomatic declines. Other business owners that may havenever considered a cash advance in the past may now bethe best candidates. Just like small business owners, MCAcompanies have also been required to be flexible with thechanging market conditions. It seems that the businessowners and MCA companies that are able to adapt to thesechanges are those that will be around for the long run.Brian BartosDirector of Business DevelopmentGRP Funding, LLCbbartos@grpfunding.comMarket disruptions have also been accompanied by a risein bankruptcies, foreclosures, and businesses closing theirdoors. In response, numerous cash advance companieshave also responded with their own underwritingenhancements to mitigate defaults. Many would agree thatit seems documentation requirements, acceptable SICtypes and maximum funding limits are changing on acontinual basis.Being that Merchant Cash Advances are typicallyunsecured, and don’t require collateral or a personalguaranty – the funding companies are making every effortto protect their investment by making smarter creditdecisions. Underwriters need to be certain that the dailycollection will not impact the merchant in a negative way.They will also want to verify that the funds are being usedfor a good business purpose, and not just to keep the doorsopen. Merchants applying for funds to catch up with thelandlord or delinquent bills are typically turned down.www.mcaforums.comCopyright 2009 MCA Forums.

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1LeadsAs in any sales environment, You are only as good as the contacts youmake and the data you are provided. Leads play a definitive role in yoursuccess. Yet these leads come in many shapes and forms. There aredirect inquiry leads, online leads, opt in leads, D&B leads and thestandard cold call generated leads. The latter generally tend to be the bestlead type as they preferably were generated by none other than yourselfand you can attest to the quality of them. In the Merchant Cash Advancefield all leads should be treated equal as the commodity and service weare offering is one that all business owners are always in dire needof.cash. So whether you call a 70 dollar call center generated hottransfer or a free yellow pages listing the opportunity for you to achievesuccess will always be present. Remember those who are successful gotthere by one of two ways, either lady luck or hard work. Keep dialing andremain professional and watch your business grow.Offshore Call CentersWe have all been approached at one time or another with the possibility ofutilizing an offshore call center to either generate leads or to take the salefrom application through funding. Buyers beware as the majority of thesecall centers generate second rate leads. It will really be up to you as adomestic agent to qualify the Merchants and re explain to the them theentire program.Key Questions when pre qualifying a Merchant:1. What is your credit score?2. How much do you process monthly3. How long have you been in business4. What does your personal credit profile look like5. Do you have any Judgments, Collections, Bankruptcies, Foreclosures orTax liens?6. Do you have a Current Cash Advance? If so what is your balance?www.mcaforums.comCopyright 2009 MCA Forums.

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1From The Desk of anUnderwriterWell, well, well.Do I have a story to tell you! I may havegone from the worlds most valuable player to the least likedin as little as 24 hours, you must all understand that I havebeen hit as hard or even harder than you!I know we have a unique product and our clients are notthe "bank types" yada, yada, yada! Yet I am the one gettingblamed from both sides, my boss and his bank andfrom the ones who used to send me chocolates and flowerswhen I approved their deals.the agents!As we have all heard there is always 2 sides to every story,let me tell you about the third side, Mine. I have been anunderwriter for the last 19 months. Prior to that I was in theinsurance underwriting industry about as far away anddrastic change as one can accept. When I first startedunderwriting files my approvals were based on theMerchants ability to repay relative to their current andhistorical processing, now the Merchant must be the perfectcandidate for an advance in order to qualify.So here I am as a mere mortal underwriting the new batchof files, I run their credit and every other cash advanceprovider populates under recent credit pulls, the Merchantjust lost an investment property to foreclosure, and is stillmanaging to make all their other payments on time. TheMerchant still processes twenty seven thousand dollars onaverage monthly albeit still off the high of forty fourthousand from last August and I have to go fight with uppermanagement for an exception because the Merchantscredit score is below our "new" guideline limits. The funnything is, the new guidelines seem to circulate so oftenaround here, that I haven't even bothered looking at themost recent update since I know there will be a revised onein circulation by Friday!Oh ya did I mention that upper management just got out ofa meeting reviewing last weeks defaults. Good luck on theexception!If you ask are we picking the cream of the crop, the answerin more words or less is yes. We need to make up for all ofthe defaults that took us from very profitable to a breakeven in the past year.Do the math, to obtain breakeven we had a lot and I meana lot of defaults. The funny thing was that when my coworkers and I underwrote these files, the Merchants werestrong and consistent, now they are dying a slow anddrawn out death!www.mcaforums.comCopyright 2009 MCA Forums.

The Company That Works For You!At Benchmark Merchant Solutions,credit card processing is looked atin a whole new way. While mostprocessors give you set fees, BMSworks with you to make each dealthe most profitable for you!At BMS, you are the boss!Every deal you sign up with BMS isstructured to best fit your needs andyour clients’ needs. BMS is a strongbeliever in teamwork, honesty andpersonal attention to detail, ensuringcomplete satisfaction for all of ouragents and comBenchmark Merchant Solutions, LLC is a registered ISO/MSP for HSBC Bank USA, National Association, Buffalo, NY

ictoyourdoor.

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1How Merchant Cash AdvancesWork – By Business WeekAs attention grows, providers of the loan alternativeare trying to avoid regulators' scrutiny. Here's what youshould know about the industrySmall-business owners who need quick access to capitalhave a burgeoning industry eager to fund them: merchantcash advance providers. The decade-old industry hasgrown significantly in the past two years, to more than 50providers, observers say, and the tight credit environment isfueling demand. As interest in their business grows,providers—who charge premiums of 30% or more on themoney they advance—are trying to promote industrystandards to avoid scrutiny from regulators.Cash advance providers offer businesses a lump sumpayment in exchange for a share of future sales. Theymostly target retail, restaurant, and service companies thathave strong credit-card sales but don't qualify for loansbecause they have bad credit or little or no collateral. Thecatch for takers is how much cash advances cost comparedwith interest on a loan or credit line. The equivalent interestrates can range from 60% to 200% APR, according toLeonard C. Wright, a San Diego accountant and "MoneyDoctor" columnist for the American Institute of CPAs. Hesays that may be acceptable for companies with no otheroptions, but business owners need to treat the advance likea loan and understand what the costs are.Merchant cash advance companies take pains to point outthat advances are not loans; instead, the deal is a"purchase and sale of future income." That means thatmerchant cash advances are not bound by laws thatregulate lenders and limit interest rates. Instead of requiringregular fixed payments, they directly collect a setpercentage out of a merchant's daily credit card sales untilthey recover the advance and their premium, usually infewer than 12 months.Advance providers say businesses benefit because theamount they pay varies with their cash flow, so they payless in slower months. "When a business takes a loan, theyhave a firm date that it has to be repaid; they have fixedpayments that have to be made on a schedule," says MarkLorimer, chief marketing officer of Kennesaw (Ga.)-basedAdvanceMe, which pioneered the industry in 1998. "In amerchant cash advance, there is no due date, there is nofixed payment."Room for GrowthObservers see plenty of room for growth in the merchantcash advance industry. Advance providers have penetratedjust 10% of a market potentially worth 5 billion to 10billion in outstanding advances, says Marc Abbey,managing partner at consulting firm First Annapolis, whohas researched the industry. Most business owners whouse merchant cash advances would prefer conventionalcredit, Abbey says. But if they're unable to borrow, someswallow hard and take the high-cost advances.Tony Boulton, owner of the three-person kitchen supplystore Design & Grace in Grapevine, Tex., got 20,000 fromAdvanceMe in 2007, which cost him 27,000 in credit-cardsales. He renewed for the same terms when his firstadvance was paid for, because he needed the money forworking capital. Boulton says he'd rather have a bank lineof credit, but he's been repeatedly turned down. "It's theonly way that I've found of getting funds that I need," hesays. "The sooner I can get out of it, the better. But rightnow it's the only option I have."The costly funding is not for every merchant. Jim Amato, aformer CPA who now owns a seven-employee wine store inBaltimore with 1 million in sales, considered a merchantcash advance to fund store renovations because bankswouldn't accept his liquor inventory as collateral. Bethesda(Md.)-based RapidAdvance offered him a 42,600 paymentin exchange for collecting 59,788 of his credit card sales,which they expected to recoup in nine months by taking18% of Amato's Visa (V) and MasterCard (MA)transactions. Taking the advance would be the equivalentof borrowing at about 50% APR. "Basically I would be in aloss situation immediately," Amato says. He passed.www.mcaforums.comCopyright 2009 MCA Forums.

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1Without commenting on Amato's situation specifically,RapidAdvance President Jeremy Brown says responsiblemerchant cash advance companies are careful not toretrieve so much money from a customer that the businesswon't be able to survive. "If you're operating under a verythin margin like a grocery store, for example, you have tobe very careful with that retrieval rate," he says. Advanceproviders typically collect between 8% to 10% of grosssales, Brown says, but in the case of a low-marginbusiness, they might collect just 1%. AdvanceMe has aself-imposed limit of retrieving no more than 9% of grossrevenues, Lorimer says.Some critics say merchant cash advance providers aresimply lenders skirting usury laws. Anat Levy, a BeverlyHills attorney, filed a federal class-action suit againstAdvanceMe in May claiming that the company's advancesare thinly disguised loans and should be regulated as such.AdvanceMe and other merchant cash advance companiessay they do not ask for collateral or personal guarantees,and they assume the risk if a business fails. But Levy saysbusiness owners who take advances have to agree to "verybroad, very ambiguous clauses" that can leave them on thehook if the business goes under. "If you change the pricingof your menus, you've breached the contract," she says.Bad Apple WorriesAdvanceMe would not comment on the pending suitdirectly, but Lorimer called the idea that the company wouldpursue an owner's assets based on a menu change"absurd." Lorimer adds that three out of four customersrenew their advances, and AdvanceMe has an interest inkeeping them healthy. He says AdvanceMe wants to dealwith businesses that are using advances to grow orimprove their companies, not as emergency rescuefunding. "If a business goes out of business, then we takethe loss," he says.However, Brown and others in the industry readily admitthat some merchant cash advance companies don't actresponsibly. Industry leaders say they're trying to promotebest practices to avoid attracting regulators' attention. (AnAdvanceMe whitepaper describes the challenge: "Regulateourselves, or someone is likely to do it for us.") To that end,Brown formed a trade group, the North American MerchantAdvance Assn. last April. "They all consider a gunslinger tobe a real risk for the industry," says Marc Abbey of FirstAnnapolis.Credit: Business WeekBrown says he's particularly concerned about howmerchant cash advances are represented by third-partybrokers, who are a major sales channel for the industry."We do worry about how they're presenting the product. Arethey explaining it properly?" he wonders. Reports that outof-work mortgage brokers are flocking to the merchant cashadvance industry—a development one companyannounced in a press release in March—also raisedconcerns about responsible business practices.www.mcaforums.comCopyright 2009 MCA Forums.

lTime.HigherContactRa velopmentPhone:( ) - xEmail:partners@MerchantCashFinder.com

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1The 10 Hottest Forum Threads of JanuaryLog on to www.mcaforums.com today to participate the most talked about discussions!1. Ponzi scheme could be associated with 1 or more cash advance companies2. InfiniCap Merchant Capital3. Looking for Personal recommendations4. Help!!!! I'm an easy sell!!!!5. Anyone hear of On Deck Capital alternative business loan?6. Popular Merchant Funding Companies7. North American Merchant Advance Association Formed8. Merchant Cash Advance Scripts?9. How A Merchant Cash Advance Works Guide for Business Owners10. Most aggressive cash advance providerwww.mcaforums.comCopyright 2009 MCA Forums.

Only VeriFone OffersSecure Payment,With VeriFone’s ON THE SPOT secure payment solutions, you canoffer your customers a solution customized to fit their needs.Improve efficiencies, eliminate identity theft and save money byoffering PIN-based debit with payment ON THE SPOT.“ON THE SPOT” describes VeriFone’s solutions for payments at the point ofservice. It’s about bringing secure, efficient payment solutions right to the spotof the transaction. The Vx 670 ON THE SPOT payment solution was designedfrom the ground up for secure payment, wherever your customers are.Portability of the solution is key. VeriFone’s new Vx 670 wireless solution is thesmallest all-in-one wireless handheld payment device. Plus, the Vx 670 offers: Smart durability – designed for frequent drops Moisture-resistant display, keypad and magnetic stripe reader Built-in printer on the actual device Server- AND Guest-ready user interface Advanced security Small size, big features The latest Wi-Fi encryptionVx 670

ON THE SPOT Managed SolutionsON THE SPOT Managed solutions are a unique and exciting offering for the POS industry. The solutionbrings the portability of the Vx 670 together with a web-based service designed to allow merchants that donot have a Restaurant Management System (non-integrated) to add similar types of services that onewould provide, all from a PC with an internet connection. With VeriFone’s Managed Services Portal, youcan offer your merchants a complete solution, including benefits such as: Transaction consolidation Terminal and transaction management Reporting Automated settlement services PCI/DSS ComplianceON THE SPOT Managed Wi-Fi SolutionON THE SPOT Managed GPRS Solution Vx 670 Wi-Fi Wireless terminal(s) Vx 670 GPRS Wireless terminal(s) ServPOS Software that was designed for aconsumer-interactive environment ServPOS Software that was designed for aconsumer-interactive environment VeriFone Managed Services Portalcommunication VeriFone Managed Services Portalcommunication Industry’s best extended warranty andinsurance services Industry’s best extended warranty andinsurance services 24-7 Help Desk Support 24-7 Help Desk Support Business Grade and Highly Secure Wi-FiAccess Point and Router with Hot-Spot Option Multi-Carrier wireless service with seamlessroaming between multiple carriers includingCingular and T-Mobile – all from One SingleAccount / One SIM chipVx 670 Wi-FiVx 670 GPRSManagedServices PortalProcessorHostThe ON THE SPOT Managed solution makes wireless payment solutions easy for merchants to use andeasy for MSRs to sell. Plus, special VeriFone Connect bundles help you bring it all together. VisitVeriFoneZone.com today or call your sales rep for more information. 2006 VeriFone. All rights reserved. VeriFone, the VeriFone logo, and Vx 670 are either trademarksor registered trademarks of VeriFone in the United States and/or other countries. All features andspecifications are subject to change without notice. 10/06 45503 Rev A

Merchant Cash Advance PublicationFebruary 1, 2009Vol. 1 Issue 1ADVERTISING WITH USThe MCA Forums & Publication is the largest and fastest growing social networking sector in the merchant cash advance arena. Whether you’re a directfunder looking to recruit independent sales offices, credit card

merchant cash advance agents as there are out there, there are equally as many Merchants who have never heard of the MCA program. An Agent must be astute, well versed and well educated on their product line to explain to a Merchant the benefits of their program. Remember, this is not a loan, it is an advance, it is a purchase and sale agreement to