Merchant Cash Advance Industry Update

The merchant cash advance industry has certainly made adjustments during these challenging economic times. As I've pointed out in 2007, companies that didn't make adjustments to their underwriting model would certainly be in trouble (eg. funding high risk business types, giving merchants too much money than their cash flow can handle, etc.) are now feeling the pain including some large merchant cash advance providers that have layed off a significant percentage of their staff and/or have lost their credit lines and/or have had them significantly reduced impairing their ability to fund new merchant cash advance deals. Those merchant cash advance providers that did position themselves correctly in late 2007 / early 2008 by underwriting correctly now have capital available to work with stronger credit applications in this recession that can not seek traditional business loans from their bank.

As I've also mentioned time and time again, merchant cash advance sales agents / brokers that were running large phone rooms with low cost marketing techniques such as voice broadcasting are finding it very hard to survive as this model was based on finding a "sucker" (sorry, a naive merchant cash advance provider, to fund their high risk paper) and underwriting has tightened up too much industry wide for these large phone rooms to survive on a low approval rate that is common with their marketing techniques.

Also, as I discussed in September 2007, in the post, Invasion Of The Subprime Mortgage Brokers we are now seeing the majority of this group leave the merchant cash advance industry as apparently they didn't learn their lesson with subprime mortgages, that you can't make a quick buck with this industry, it requires hard work. Unfortunately, some merchant cash advance providers (Editor's note: AmeriMerchant did not) aligned themselves with merchant cash advance resellers that were former subprime mortgage brokers and paid the price by buying the merchant cash advance paper they were selling them that turned out to have astronomical bad debt rates.

Similar to other industries, the current recession the United States is experiencing, will shake out the weak players and will allow the strong players to emerge even stronger.

AmeriMerchant / myself wish everyone a happy and healthy holiday as well as a prosperous New Year and we look forward to 2009!

Merchant Cash Advances And FICO Scores

It is interesting to see during this recent business credit crunch that the average credit profile for a merchant cash advance applicant is on the rise. We have seen a plethora of FICO scores in the 700s and even 800s which typically first seek traditional bank loans and credit lines before seeking alternative funding products such as a merchant cash advance. As I mentioned in my previous post, Merchant Cash Advance And The Business Credit Crunch, that the current conditions of the credit environment is an opportunity to introduce businesses to the merchant cash advance product that historically may have sought other options.

As I also pointed out previously, these better credit applicants will be less receptive to "cheap marketing" techniques such as voice broadcasting but require a more consultative approach about this product. There is an opportunity here that once the better credit score applicants are exposed to this product that they can use it in conjunction with traditional bank loan products once the credit markets eventually open up should the traditional product not be able to meet 100% of their needs. For example, a bank may only be willing to eventually give a business a $100,000 line of credit when they need $150,000 and this is where they can mix it with an additional $50,000 through a merchant cash advance. Time will tell, but I believe the average FICO score of the merchant cash advance customer will increase and remain higher once the credit markets / banks open up again to small businesses.

Merchant Cash Advance And The Business Credit Crunch

I've gotten several emails about how I think the recent business credit crunch will affect the merchant cash advance industry. The way I see it, there are pros and cons that are going to evolve as a result of the recent credit crunch and what appears to be a potential meltdown of certain aspects of our financial system. There isn't a newspaper, magazine, radio or television program that hasn't spoken about how hard it has become for small businesses to obtain a business loan, line of credit, etc. from their local bank. When it comes to business loans, banks have traditionally been a challenge for small to medium size businesses, especially retailers and restaurants without a strong personal guarantee (even then it can be challenging). Now, it's next to an impossibility. With the mergers of Washington Mutual / Chase and the scenario with Wachovia and Wells Fargo / Citibank there will be even fewer banks for small businesses to turn to.

All these factors above have resulted in a HUGE increase in demand for the merchant cash advance product. However, because of an increase in default rates (partially do to the economy, partially due to inexperienced merchant cash advance providers who first entered the market in 2007), you are seeing the underwriting criteria for ALL merchant cash advance providers tighten up (some have even been driven out of the marketplace because they funded the "wrong deals" in 2007 and their funding sources have cut them off).

However, there is a large opportunity now for MCA providers as well as Merchant Cash Advance resellers / agents to target a whole new clientele with stronger credit scores that typically would have gone to traditional sources such as bank, that no longer can. The good news is this will work well for MCA providers and small / independent sales organizations. The bad news is for the larger "merchant cash advance phone rooms" that we saw emerge from the subprime mortgage lending business, I can't see how they will be able to survive in the long run. These companies were setup and able to survive by finding "the new MCA provider in town" that would take their C,D and E paper because they didn't know any better. These places to "dump garbage paper" are all but gone and add to the fact that we are seeing a trend in a stabilization and/or a decrease in merchant cash advance broker commissions as I predicted would happen in 2008 (see 2008 Merchant Cash Advance Predictions) will make it next to impossible for these large cash advance broker shops to survive. The smaller independent shops that aren't using cheap / commodity type marketing techniques (eg. voice broadcasting, buying leads from telemarketing firms) and are actually taking the time to target higher end merchants will find a viable business model as they don't need to write a huge quantity of business like the larger merchant cash advance reseller brokers to survive.

Another aspect of the merchant cash advance business I predicted back in December 2007 was that Underwriting will tighten up / approval rates will go down. This is certainly not a bad thing as if MCA providers didn't change their underwriting models in 2007, they will not make it to the end of 2008 (In fact, a few merchant cash advance providers exited the business and/or lost their credit lines / were liquidated by their investors). We also have seen a complete slowdown of new players entering the merchant cash advance space most likely due to fear and the lack of their ability to raise capital in this environment.

With all the above said, I believe this is probably one of the best times for the merchant cash advance industry to come out even stronger. Those that aren't underwriting foolishly (or approved too many bad deals over the last 6 - 12 months) will be able to increase the credit criteria of their average merchant and be able to emerge from this current credit crunch / volatile economy with a strong portfolio and even a stronger company. The bad news is those MCA providers who didn't underwrite properly and haven't adjusted accordingly in this environment probably won't be around in six months from now. As a merchant cash advance agent / reseller, you want to make sure you are aligning yourself with a company that will be here in six months from now to be able to pay your monthly residuals.

Merchant Cash Advance mentioned in MSNBC / Entrepreneur.com article

msnbc.com mentions the merchant cash advance product in a recently featured article entitled Control Your Cash Flow which talks about how businesses can reduce their vulnerability during this recent credit crunch. One of the ways it talks about how businesses can do this is to "Raise capital in innovative ways other than traditional banking." and specifically mentions about a merchant cash advance, namely "If you accept credit cards, there is something called a merchant advance where a third party will come in and review what your revenues have been and advance you capital today that you pay back in anticipation of future credit card receipts." This article appears to be syndicated from Entrepreneur.com and further backs up the idea that the merchant cash advance product has become a mainstream, accepted form of alternative financing for small to medium size businesses.

New York Times Cover Story Regarding Banks Reducing Business Loans - A Definite Merchant Cash Advance Booster

The front page of today's New York Times features an article titled Worried Banks Sharply Reduce Business Loans. This article talks about how banks are struggling to recover from their losses on real estate by curtailing loans to businesses which should show an increased demand for alternative working capital products such as the merchant cash advance.

2008 Merchant Cash Advance Predictions - 1/2 Way Follow Up

In December 2007, I wrote a post entitled 2008 Merchant Cash Advance Industry Predictions and being that we are now just halfway through 2008, I wanted to follow up on this previous posting.

It looks like it's only 1/2 way through the year and I went 3 for 4 on my merchant cash advance industry predictions with 6 months to go for the fourth one to come true.

Here is a recap:

1) Underwriting will tighten up / approval rates will go down - this one I definitely hit on the head. Between a combination of a down economy, merchant cash advance providers working together to prevent fraud and many merchant cash advance providers that have either lost or in jeopardy of losing their credit lines, it's common knowledge that while merchant cash advance submissions are way up as a whole, the industry approval % is down double digits %s. This low approval rate has actually driven many large, high overhead MCA brokers to either lay off employees or completely shut down because some of the "junk paper" that was approved in 2007, simply no MCA provider will accept now.

2) Sales Agent Commissions will stabilize and/or decrease - in 2007 we saw some companies paying extravagant sales agent commissions that simply didn't make sense. One would think they were trying to buy marketshare. I would imagine after they reviewed their financials / profitability, they realized they couldn't make money paying out the type of commissions they were, hence the marketplace has adjusted accordingly. Some merchant cash advance providers / merchant cash advance agents have actually raised their cost to the customer to maintain some of these commissions.

3) Self Regulation - In December 2007, I had indicated that:

"The industry has grown to large and has too many providers to not have best practices / industry standards in place. In 2008, I believe you will see a group of the key merchant cash industry players come together to announce a set of best practices for not only the merchant, but practices to protect the merchant cash advance providers as well."

In April 2008, a merchant cash advance industry trade association called the The North American Merchant Advance Association was announced to promote best practices as well as allow the leading merchant cash advance providers to work together to introduce various risk tools to combat merchant fraud.

4) Mergers & Acquisitions - In 2008 I believe we will see the first major merger and/or aquisiton in the merchant cash advance industry.

While we haven't seen any significant US merchant cash advance provider merge with or acquire another US based provider, I still think we have some time to go. There is a huge upside in the merchant cash advance industry for private equity firms looking to enter this space. We did see a private equity firm make an investment in one leading merchant cash advance provider so far this year and I expect there will be some other deals done this year as well.

Merchant Cash Advance Cost Comparison

I have received several emails about the cost of a merchant cash advance compared to other working capital solutions. One selling point of this product is that while it's more expensive compared to traditional small business loans (assuming the merchant can qualify for a small business loan as especially in this credit crunch, banks have raised their small business loan criteria even higher), the cost is pale in comparison to any equity solution including taking on additional investors and/or giving up equity in your business. Keep in mind that a merchant cash advance is not a loan product and does not have absolute repayment like a loan which also requires a MCA provider to charge more for that compared to a traditional small business loan. With a merchant cash advance, once you sell a MCA provider your future credit card / debit card receivables that is all the MCA provider is entitled to, no future upside in the business, no profit sharing etc. So what is more expensive? A) Selling your future credit card receivables / debit card receivables at an average discount of 26% or B) Giving someone a percentage of your business forever or until you have to buy them out a premium? I can assure you that option "B" will far exceed any discount that you sold your future credit card / debit card receivables for.

Merchant Cash Advance Provider Fast Capital Ceases Operations

It appears that merchant cash advance provider Fast Capital has ceased operations. It is rumored that another merchant cash advance provider will be managing their existing portfolio / customer base for their lender, Goldman Sachs. It will be interesting to see the outcome of this.

Cover Story On AdvanceMe Merchant Cash Advance Patent Appeal

The cover story of the May 23rd edition of ISO & Agent Weekly titled, "Court Says AdvanceMe Has No Cash-Advance Patent" was an interesting article from all perspectives of this landmark ruling for the merchant cash advance industry.

In addition, in this issue, they feature a story called "Association Formed For Cash Advances" which talks about the newly formed North American Merchant Advance Association which has been receiving praise throughout the industry.

AdvanceMe Loses Merchant Cash Advance Patent Appeal

I just received word that AdvanceMe has lost their appeal on their patent. I thought the call I got was a joke because the hearing was just last Tuesday, turns out the court realized in two seconds that there was no merit to this appeal. It shows you how little basis AdvanceMe had to even appeal this decision. You can see the court's document by clicking here.

The Electronic Transaction Association (ETA) has already reported on this "lightning fast" ruling as well. Click here for the story.

Merchant Pleads Guilty To Merchant Cash Advance Fraud

A Virginia merchant committed fraud on several merchant cash advance providers and is facing up to 20 years in prison, $1 million in fines and had to surrender his house, car and motorcycles. The story can be found here.

This merchant fraudulently took a business cash advance from several MCA providers in his customer's names. One of the missions of the recently announced North American Merchant Advance Association is to prevent fraud like this from occurring.

Merchant Cash Advance Association - Another Article In The Green Sheet

The North American Merchant Advance Association has been receiving positive press in all the trade publications since it was publicly announced on April 15th that the leading merchant cash advance providers have come together. The Green Sheet has just written a story about it titled, Cash advance leaders advance.

Merchant Cash Advance Closing Fees / Consulting Fees / Personal Service Fees (PSF)

I've received countless emails about what my opinion is on agents / ISOs charging a customer an additional upfront fee on a merchant cash advance such as closing fees, consulting fees, finder's fees and/or personal service fees (PSF) and the answer is to the merchants "stay away and run." You can easily find another merchant cash advance provider that won't charge you any upfront fees and will save you potentially thousands of dollars. These fees put unnecessary strain on both the merchant and increases the risk to the merchant cash advance provider.

This money is expensive enough without an agent / reseller tacking on additional costs to the merchant. Merchants should know that an agent / reseller / ISO is receiving up to 36% of the fees that a merchant cash advance is charging the customer. For example, if a merchant receives a $20,000 advance and the payback is $27,600, the agent bringing the deal to the MCA provider can be receiving up to $2,760 in commission. The merchant is selling their receivable to the MCA provider at a $7,600 discount and the salesperson is receiving $2,760 of the $7,600 (which is 36% of the fees being charged).

Now for a agent to charge another 5% - 10% of the funded amount to the customer ($1,000 - $2,000) turns the deal from a 1.38 factor in this example to the merchant receiving $18,000 and paying back $27,600 turns the arrangement into a 1.53 factor (up from a 1.38), a huge strain on the merchant and increases the chance of merchant default as well as increased risk for the merchant cash advance provider. The agent is then earning it on both sides from the customer and the merchant cash advance provider and in this example earning $4,760 of the $7,600 discount (62% of the fees charged the customer). There is an old saying, the bears make the money, the bulls make the money and the pigs get slaughtered.

I've been told by some agents that there is no way they can make money without charging closing fees, my response to that is I've owned merchant cash advance agencies and you can easily make a lot of money in this business, especially with the equity value you build with merchant processing residual. For those that can't figure out how to make money without charging closing fees, please feel free to contact me and I would be happy to discuss a very viable model. My rebuttal to that is for those agents that have sold credit card processing, when is the last time you made $4,000 upfront on a merchant account plus receive the monthly credit card residual? Selling credit card processing is far more competitive compared to merchant cash advance.

There has been some negative press as of late about some of the sales practices in our industry and almost every single instance involved a sales agent / reseller charging an upfront fee on a merchant cash advance.

As the industry comes together to establish best practices, I would imagine and hope charging upfront fees will be one item that merchant cash advance providers prohibit.

Merchant Cash Advance Product / Association Featured In Online TV Show - SBTV.com

SBTV.COM - Small Business Television appears to be the first video broadcast about the merchant cash advance product as well as the recently announced North American Merchant Advance Association. You can view the story on MCA providers as well as the merchant cash advance industry association at sbtv.com - Small Business Television approximately 1:07 into the clip.

Merchant Cash Advance Association Mentioned In American Banker

An article about the North American Merchant Advance Association was recently written in American Banker (You will need a subscription to American Banker to view the article). In addition to The Green Sheet story, this is the second article about the merchant cash advance industry association specifically about how the industry has come together to create merchant cash advance underwriting / risk tools as well as establish best practices. This association is already starting to get recognition in all the leading industry publications.

The article features some nice quotes from NAMAA's President, Jeremy Brown of Rapid Advance. The North American Merchant Advance Association is currently in discussions with some other leading merchant cash advance providers to join and those announcements will be made shortly. I encourage all merchant cash advance providers to join this group.

Merchant Cash Advance Industry Comes Together

It was just announced today that the leading companies of the merchant cash advance industry have come together to form an industry trade association called The North American Merchant Advance Association.

This trade association will allow merchant cash advance providers to share industry education and professional development, ethical standards and best practices guidelines, the development of industry relevant products and services, and the engagement in regulatory and legislative advocacy.

An important focus of NAMAA is the creation and maintenance of a database of merchants that have engaged in unethical or fraudulent practices in securing past merchant cash advances.

I believe this association (Editor's Note: AmeriMerchant is a founding member of the North American Merchant Advance Association) will benefit the merchant cash advance providers, sales agents / representatives as well as merchants by establishing self regulation and best practice guidelines.

Any merchant looking for a merchant cash advance, I would strongly recommend working with a provider that is a member of the North American Merchant Advance Association.

Any merchant cash advance providers interested in joining, can contact me at dg@amerimerchant.com.

Merchant Cash Advance Agent Shakeout

I am seeing a new trend in the merchant cash advance marketplace, namely merchant cash advance ISOs, agents, resellers, etc. closing their doors. This is no surprise to me as we saw a huge influx of subprime mortgage brokers entering our space. I estimate there were upwards of 100 phone rooms of converted subprime mortgage brokers trying to sell the merchant cash advance product thinking it was a way to make a quick buck. Those that took the strategy that selling a merchant funding will take time and learned from the lessons of the subprime mortgage meltdown are those that are still standing and potentially will be successful. There is another train of thought that is inevitable to fail - those that thought they can sell business cash advances with minimal capital expenditure, meaning hiring unqualified salespeople using inexpensive marketing techniques such as voice broadcasting (with these providers giving the same data to 100s of phone rooms) to dial hundreds of thousands of businessses an hour with a prerecorded message. (Merchants around the country are getting 3 - 5 prerecorded calls a day). The challenge is the quality of anyone that is going to press '2' on their phone for money tends to be "lower hanging fruit" and lower quality deals. With the recent credit crunch and many merchant cash advance funding companies tightening up, some merchant cash advance agents were seeing approval rates as low as 15%-20%. There is no way they can survive and stay in business with that kind of approval rate. You did see some undisciplined merchant cash advance providers willing to get aggressive with many of these phone rooms about 3 - 6 months ago, but that has now gone away as these providers have learned their lesson with high default rates from these low quality deals. Offering a business cash advance product as your main product as I've said over and over again takes time, anyone looking to make a quick buck, they are in the wrong industry. Those that are well capitalized and run first class, professional sales organizations rather than a "boiler room" will be here for the long run.

Merchant Cash Advance Market Size - Part 2

There have been many debates as of late on what is the potential market size of the merchant cash advance industry. One item people have been debating is the saturation of the marketplace with the amount of new agents/resellers/ISOs and former mortgage brokers that are now reselling this product (There has been a decrease of new funding companies entering this space, especially those with any sizeable presence). I estimate the market size at a minimum is now $850 million annually in merchant cash advances that will be funded. Let's assume 60% of that number is first time deals which brings it down to $510 million annually, which breaks down to $42,500,000 month in new deals funded. (I actually think the number is probably closer to $50 mil a month). I like to look at it as the average funding size is around $22,000 industry wide, which amounts to a little under 2,300 merchants a month taking a merchant cash advance for the first time. That means on average there are 46 merchants per state per month taking a merchant cash advance. (I understand some states are larger / more populated than others). But, no matter what argument you want to make, I don't think we've hit the tip of the iceberg with this product as there is no way only 46 businesses per state per month need access to non-traditional working capital for their business. I believe that number can be increased at least 10 fold making this upwards of a ten billion dollar industry. The ten billion dollar question is how do you reach these merchants cost effectively?

Merchant Cash Advance Rumor

I've heard now from multiple sources that one of the largest and oldest merchant cash advance providers is having some bad debt problems as a result of not having any discipline and funding deals that never should have been funded.

Merchant Cash Advance Blog #1 On Google

Someone just sent me an email that the Merchant Cash Advance Blog is the #1 site on Google when you search on 'merchant cash advance.' With that said, Google reindexes itself so often and by adding this post may change the position. So, in addition to the Merchant Cash Advance Blog being mentioned by various media outlets including The New York Times, we are also featured as the #1 most relevant website by Google (at least for the time being) on the search term, "merchant cash advance."

AdvanceMe Takes A $565,000 Hit

The Atlanta Journal-Constitution is reporting that merchant cash advance provider AdvanceMe has taken a $565,000 hit from an Atlanta Restaurant Group.

This is a perfect example how many times sales agents / ISOs and even merchant cash advance providers believe before a deal gets funded that it's a "good deal" because it's a large established restaurant group. Unfortunately the bigger they are, the harder they fall.

Accelerating Cash Advance

The latest issue of The Green Sheet has an updated article on the merchant cash advance industry entitled, Accelerating Cash Advance.

I think this is a very well written article with quotes from CEOs of such companies as yours truly from AmeriMerchant, American Microloan, Merchant Cash And Capital, North American Bancard and AdvanceMe.

The spirit of article is very similar in line to what many of my postings over the last few months have indicated, the days of merchant cash advance companies approving everything are over. There are some industries that may never qualify for a merchant cash advance again because simply the product doesn't work for it based on the payment flow of the industry / the ability for the customer to control the cash register.

The article also speaks to how agents / ISOs and resellers of this product should be concerned about who they are sending their deals to today. As soon as you hear a company can't fund, RUN! Better yet, don't even get to that place, a lesser, normal commission will be worth more in the long run then what seems like a too good to be true commission from a company that won't be around in the long term.

One positive aspect is that the merchant cash advance industry is coming together to establish best practices for selling the product as well as establishing risk tools to eliminate unscrupulous merchants.

Merchant Cash Advance Market Size

While the merchant cash advance industry is growing at an astounding pace, one question that keeps coming up is how saturated or not is the potential market? While there is no official study, estimates are that somewhere between 5% - 10% of the eligible marketplace has taken a merchant cash advance. I believe it's closer to the 5% range. What I do think is happening is that merchant cash advance salespeople, ISOs and agents are capturing the low hanging fruit, meaning that those merchants that have taken an advance before against their future credit card sales are one of the first to respond to a marketing campaign. The reason for this is they are more willing to listen to a salesperson as they are already familiar with the product. The challenge which takes patience is finding businesses that have never taken a merchant cash advance before, which makes up the other 90% - 95% of the potential market. The most successful merchant cash advance providers will be those that are able to tap into the other 90% - 95% of the market that have not yet taken a merchant cash advance.

Green Sheet Article - Sizing up Merchant Cash Advance

The recent issue of The Green Sheet has an article about the merchant cash advance industry, Sizing Up Merchant Cash Advance.

This article was written by First Annapolis Consulting, a consulting firm that specializes in consulting and investment bank services for the payments industry. Most of their assumptions were previously indicated in this blog including the size of the industry (First Annapolis' best educated guess is $500 million to $700 million in future receivables purchased). I believe it's closer to $1 billion at this point (as mentioned in my October 2007 posting).

They also indicate how there will be some shakeup in the merchant cash advance industry as I predicted in my 2008 Merchant Cash Advance Industry Predictions.

Credit Crunch And The Merchant Cash Advance Industry

Today's Wall Street Journal has an article entitled Credit Scare Spreads in U.S., Abroad that discusses how banks are making it even harder now for small and midsize businesses to obtain business loans.

This appears to be an exciting time for the merchant cash advance industry as it will potentially raise the credit criteria of the average applicant since borrowers who would normally goto a traditional lending source such as a bank for a business loan, may no longer be able to and will explore alternative financing solutions such as a merchant cash advance.

At AmeriMerchant, we have seen a huge increase in demand for our product over the past 60 - 90 days and I expect this trend to only increase. Merchant cash advance providers still need to make sure they are only providing working capital to those that truly qualify for it. I believe with the recent credit crunch, we will see more qualified applicants.

And for those that are keeping track, I predicted this back on my December 1st posting Merchant Cash Advance Industry Affected By The Subprime Mortgage Bust where I indicated:

The positive effect has been that we are also seeing some better quality applicants who in the past might have used traditional financing such as tapping into the equity in their home to help fund their business or a straight business loan from a bank. With the recent credit crunch and the decrease in real estate value in many areas of the country, many business owners are no longer able to use their home equity as a source of working capital for their business.

$97 Million Merchant Cash Advance Lead

I've been in the merchant cash advance business for a long time and this email I got today certainly made me realize that now I've seen it all. I thought this would add some good humor to the blog.

Now lets see who has the deepest pockets out there (or has lost their mind to even consider giving a merchant cash advance this size). If anyone knows of an alternative financing source for this transaction, let me know and I'll put you in touch with the salesperson.

-David

Sent: Monday, January 21, 2008 4:17 PM

David,

I have been working your cash advance program and came across something big. Probably too big, but I have a question and was wondering if you could help. There is an Indian gaming company that owns 5 casinos. They want to borrow $97M against their future cash flow (approx. $48M annual Net Income). Can you do anything with it or do you know where I can find someone who can?

Nation's Restaurant News Article About Merchant Cash Advances

Nation's Restaurant News, one of the leading trade publications for the foodservice industry, came out with a nice article on January 14, 2008 entitled Eschewing banks, some operators find fast, favorable financing with cash advance firms. This article is about the merchant cash advance product including the restaurant owner's perspective. You will need to register with www.nrn.com before being able to view it. They also have a print publication which the article may appear in.

Merchant Cash Advance Rumor

There is a rumor that has been floating around the merchant cash advance industry for the last week or so (I've heard it now from three different sources) that a large merchant cash advance company is about to acquire a New York based merchant cash advance provider. I guess we'll know sooner than later if this rumor is true, my bet is it's not. If it is, I guess prediction #4 - Mergers & Acquisitons in my posting 2008 Merchant Cash Advance Industry Predictions would come true (not bad on my part, considering I just posted it on December 28, 2007).