Monday, February 18, 2008

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.

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