Tuesday, January 22, 2008

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.

Monday, January 21, 2008

$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.


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


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?

Tuesday, January 15, 2008

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.

Friday, January 11, 2008

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).