AdvanceMe’s BIZ CASH NOW iPhone App: Making Merchant Cash Advances Easier Than Ever!

If you have not already heard, in November, we were proud to develop and release an iPhone application designed to specifically serve the needs of Merchant Cash Advance customers.

Looking through Apple’s iPhone store, we noticed that while consumers have many calculators and tools available, there were not many designed to specifically help small business owners who are seeking working capital for their businesses. Our BIZ CASH NOW app is intended to help fill this void.

Benefits of the BIZ CASH NOW app include:

• A built-in, real-time calculator which gives small business owners the ability to quickly estimate the MCA amount that may be available for their businesses
• Industry-specific special promotions, which provide small business owners with opportunities only available to BIZ CASH NOW app users
• A Simplified Merchant Cash Advance application that helps small business owners complete and submit a request for an MCA and all the special promotions for which the business qualifies
• A Frequently Asked Questions section that simplifies the application process

There is more information here: http://www.advanceme.com/iPhoneApplication.htm
Visit the iTunes Store to download this free application (key in search box: BIZ CASH)

Merchant Cash Advance – It’s in the Way that You Use It

In November, the Green Sheet, an important publication serving the payments industry, wrote an interesting article entitled “The Squeeze in Merchant Cash Advance.”

The focus of the article is how the Merchant Cash Advance (MCA) industry has seen changes in the past few years. (Note: an MCA is sometimes called a Business Cash Advance)

While there are many interesting points addressed in by the article, perhaps the most pertinent to businesses considering an MCA is the idea that how an MCA is used is becoming increasingly important to providers evaluating the applications.

Our own Chief Marketing Officer, Mark Lorimer, is quoted:

“Lorimer said AdvanceMe has seen a shifting mentality among merchants, likely springing from the economic downturn. Before most [Merchant Cash A]dvance recipients were looking to simply expand their businesses by increasing existing inventory, opening new locations and building on current ones, but now the money tends to be used for a more strategic brand of repositioning.

‘It may be a retail store moving from high-end clothes to more accessories, or a high-end automotive place maybe using it to stock up inventory that's not quite so expensive,’ Lorimer said. ‘Two or three years ago people were using the money a lot more for opening new locations and expanding and buying out a partner. We're seeing a lot more merchants now using the money to refine their concept or change slightly to reflect what they're seeing in their local marketplace.’"

In this blog, we have highlighted many times that how you use an MCA is crucially important. There are definitely going to be good and bad uses of this working capital, so we suggest that you learn all you can to ensure you continue making the best possible decisions for your business.

Curious as to the difference between a “good” and “bad” use of this product?

Refer to these previous posts for clarification: Merchant Cash Advances for Handling Remodeling Costs, Buying out a Partner with a Merchant Cash Advance, Using a Merchant Cash Advance to Fuel Growth, Use a Merchant Cash Advance for Trade Show Participation, Get a Merchant Cash Advance for Training, Using a Merchant Cash Advance to Prepare for the Holidays .

We also covered this topic very specifically here: Comparing "Good" and "Bad" Uses of a Merchant Cash Advance.

Comparing “Good” and “Bad” Uses of a Merchant Cash Advance

The ability to compare and contrast “good” and “bad” uses of a Merchant Cash Advance (sometimes called a Business Cash Advance) is an added benefit of our recent White Paper entitled: Merchant Cash Advance: Not for Every Business. Is it Right for Yours? If you have not yet had the chance to read this Merchant Cash Advance White Paper, we encourage you to do so.

Better Decisions = Better Business
As a business owner, you do everything possible to ensure the longevity and success of your business. If you are answering a working capital need for your business, one solution worth considering is raising capital with a Merchant Cash Advance (MCA).

Depending on the circumstances, this could be a smart choice for your business. However, depending on the circumstances, this could also be the wrong choice for your business.

To ensure that you continue making the best choices for your business’ strength and longevity, you’ll want to know the difference between “good” and “bad” uses of an MCA. While these points are made clearly on pages 4 and 5 of the White Paper, we will use this post to dig a little deeper.

Evaluate and Compare
An MCA is not going to be the best answer for every situation, but it is going to be a great answer in many situations. One way to determine on which side of the fence your situation falls is to do a careful evaluation of the situation, and measure each potential solution against the same set of criteria.

In many instances, some of the criteria evaluated to determine if an MCA makes a good fit or not would include:

• The business’ specific working capital need(s)
• Available assets to secure a solution (collateral, etc.)
• How fast the money is needed
• The time required by the business to complete the obligation
• The cost (in dollars) of the solution
• The cost (in effort) of the solution

While these are not all of the points your business should consider, they do illustrate that you can use a simple method of initial evaluation to start to “rule out” or include different working capital solutions among the options for your business.

Good Uses of a Merchant Cash Advance
The White Paper states: “…business owners must make sure that an MCA is being used for the right purpose and under the correct conditions.”

The document goes on to identify the following purposes and conditions as good ones for MCA consideration:

• To take advantage of an unexpected opportunity that can make the business money at a favorable return on investment (ROI).
• To manage fast growth.
• To avoid the “negatives” of other forms of capital which may outweigh the relative costs of an MCA.
• To cover an unforeseen event that could severely impact the business if it is not dealt with immediately.

Bad Uses of a Merchant Cash Advance
The White Paper also identifies certain uses of an MCA as “bad,” based primarily on an inability to prove an ROI. If your intentions for using the proceeds of a Merchant Cash Advance are among any of the following examples, you should very carefully consider your options:

• Setting up a “rainy day” fund.
• Making a purchase or investment for which you can’t project a favorable ROI.
• Taking money out of the business to support a personal lifestyle that is unwarranted given the health of the business.
• Purchasing something without investigating other alternative sources of capital first.
• Using the money to “float” an otherwise sinking enterprise.

(For more detail and some examples of these uses, please refer to the Merchant Cash Advance White Paper).

Bringing it All Together
The White Paper makes one point about raising business capital very clear: “Return on Investment, or ‘ROI,’ is a concept every business manager should apply to every investment they make. Whether it’s new inventory, a new location, a new employee, or a new sign or menu, the business manager must begin with a clear picture of how much the action will cost, and how much they expect to earn because of that action.”

You can see how this idea works through the examples of both the “good” and the “bad” uses of an MCA. If you have a project that shows a very positive potential ROI, chances are much greater that an MCA is worth evaluating as a viable option.

The White Paper offers this guidance:
“No business owner should seek new capital without careful consideration and education. At a minimum, the business owner must (i) investigate all available alternatives and decide which form of capital suits their unique business best; (ii) develop a clear picture of the business’ cash flows to ensure the business can comfortably comply with the agreements associated with the new capital; and (iii) prepare and plan to maximize the benefits the new capital will bring to the business.”

As with any important business decision, you should always refer to trusted advisors, legal counsel, and industry experts before making a commitment.

What Do You Think? Has education and research played an important role in how you make most business decisions?

Is Merchant Cash Advance the Best Way to Raise Cash for Your Business?

Answering this question is the main purpose of our recent White Paper entitled: Merchant Cash Advance: Not for Every Business. Is it Right for Yours? If you have not yet had the chance to read this White Paper, we encourage you to do so.

Different Options for Raising Business Cash
The White Paper identifies three broad areas of capital raising available to most businesses: equity financing, borrowing or leasing, and asset sales. On pages 3 and 4 of the White Paper, detail is offered to explain how each different type of cash-raising effort generally works.

The first step in making better business decisions is to arm yourself with knowledge. You’ll want to clearly understand the nuts-and-bolts of all your potential solutions.

Conduct research to learn how each option works, who provides them, what makes qualification possible, and what commitments are required of you or your business in connection with each option. Understand the potential long-term and short-term effects of each option. Knowing how they work will help you to make the best decision on when they might work best for your business.

You will always be able to make better decisions by increasing your detailed knowledge of the potential solutions to a range of situations your business might face.

Steps Toward Making Better Decisions on Raising Cash for your Business
Ultimately, knowing whether or not an MCA is the right choice for your business’ specific situation depends on comparing an MCA to your other available options and measuring (or estimating) the impact of the features of each option on your business. The following steps should help you in achieving this goal:

• Research how equity financing, borrowing and leasing, and asset sales could pertain to different situations faced in your business or industry.


• Build a firm understanding of how each different capital-raising effort works, who provides each one, and what it takes to qualify. Learn more about the potential short and long-term effects of each solution.


• Talk to colleagues and advisors and refer to trusted industry experts to gain additional insight BEFORE making any important decisions.

You would also want to know very concretely what a “good” use of a Merchant Cash Advance would be when compared to a “bad” use of an MCA. Our next post will continue extracting details from our latest Merchant Cash Advance White Paper, and look a little deeper into these clarifying distinctions.

What do you think? Do you tend to research and understand the far-reaching effects for every potential option when facing a business need?

Merchant Cash Advance White Paper

We recently released a new white paper entitled Merchant Cash Advance: Not for Every Business. Is it Right for Yours? If you did not yet get a chance to read it, you can do so here, or by clicking the linked title above.

This White Paper is the third in a series addressing current issues impacting the Merchant Cash Advance (MCA) industry. The focus of the new White Paper addresses helping business owners to make more informed decisions, specifically decisions regarding their business’ potential working capital options.

To quote from the press release:
“This White Paper urges business owners and their advisors to make “informed choices” of whether an MCA—or any working capital solution -- is the most appropriate option for their business. Through education, investigation, preparation and planning those informed choices become smart business decisions.”

Digging a Little Deeper
In the next few blogposts we publish, we intend to look at some of the specific points that are put forth in the White Paper and delve deeper into what it could mean to small business owners. The intent is to use these posts and the White Paper to help every business owner make better decisions when they are considering a Merchant Cash Advance.

Specifically, we will use the blog to address whether or not a Merchant Cash Advance is the best way to raise cash for your business and we will compare some of the criteria on what might be considered the “good” and “bad” uses of an MCA.

Our goals for these posts are that we want you to be able to look at specific scenarios facing your business and be able to understand where an MCA could make a smart decision, contrasted with the situations where it would not be as prudent.

As always, if there are any comments or points you’d like to make, we encourage you to do so.

What do you think? Which White Papers have you read that have helped you to make a better decision for your business?

Using a Merchant Cash Advance to Prepare for the Holidays

When autumn leaves first begin to add a bit of color to the landscape, many small business owners start to look forward to making the most of the upcoming holiday season. For many, using a Merchant Cash Advance is a smart way to take advantage of this time of year and make the most of the increased opportunity it brings.

• Stock up on supplies. If you have a retail establishment, you can use a Merchant Cash Advance to stock-up on merchandise that you know will sell over the holidays. Pre-order items that have a history of high sales or expand into seasonal product lines. By using the efficiency and speed of a Merchant Cash Advance you can secure the inventory that enables more sales, perhaps taking advantage of discounts offered when buying early or in bulk.


• Accommodate more people. If you have a retail business, you might need to accommodate more traffic by adding some counter space or additional product displays. In a restaurant, you might invest in additional tables, or purchase the supplies needed to accommodate (or cater) private Holiday parties. By planning ahead and getting a Merchant Cash Advance now, you can be ready when people start looking to your place of business as the place to be during the Holidays.


• Get the extra help needed. Additional traffic and more opportunity might mean you need to hire some temporary, seasonal help to assist your staff. A Merchant Cash Advance can give you the money you need to cover this cost so that every customer receives the best possible service.


• Advertise your strengths. It is no surprise that the Holidays can create lots of potential customers for you – but these people will need to be aware of who you are, where your business is located and why they should visit your business. By using a Merchant Cash Advance to handle advertising costs, you can market your goods and services to reach the best possible clientele.

Make an Action Plan
Proper planning is what will allow your business to capitalize on the holiday traffic. As we mentioned in our recent Merchant Cash Advance White Paper, investing in opportunity is one of the best possible uses of a Merchant Cash Advance. As so clearly illustrated by the bullet points above, the holidays traditionally offer many lucrative opportunities for businesses to explore.

The best way to take advantage of the potential holiday traffic is to carefully plot out your strategy. Once you know specifically what you’d like to do, you must:

• Determine the budget (time and money) needed to make it happen
• Calculate your assumed return on investment (ROI) to make sure this effort will be profitable
• Identify your potential sources for working capital and contact specific providers for more details
• Create a schedule to make sure everything happens smoothly, and on time

With a little forethought and some smart planning, your business can truly make the most of the upcoming holiday season. And for some businesses under the right set of circumstances, a Merchant Cash Advance is a valuable option for seeing the working capital needed to capitalize on seasonal opportunities.

For more information, refer to these articles:
http://www.morebusiness.com/holiday-advertising-tools

http://www.allbusiness.com/retail-trade/apparel-accessory-stores-womens-specialty/4251284-1.html

http://www.inc.com/news/briefs/200708/0807ports.html

For more information about using a Merchant Cash Advance for making the most of the upcoming holiday season, visit AdvanceMe.com

What do you think? How will your business prepare for taking advantage of this year’s holiday season?

Free Legal Advice about Merchant Cash Advances

There is a website offering free legal help and advice called “Avvo.Com” (short for avvocato, lawyer in Italian). In addition to helping you find a lawyer based on specific criteria, this site also offers a place for people to ask legal questions which are fielded by the many lawyers who participate with Avvo.

Recently, someone asked a pertinent question about how Merchant Cash Advances might play-out for a business facing a looming bankruptcy. You can see the whole thread here.

The merchant stated he was facing a bankruptcy in 2 months, and wondered if a Merchant Cash Advance might be a good way to “pay off some of my secured debt that will not get expunged” by the bankruptcy.

At the time of this writing, four lawyers from Avvo had responded to the question, and all of them concurred: to consider a Merchant Cash Advance as a solution in this instance would most likely constitute fraud and would not help this merchant at all.

The lawyers continue their warnings that if the merchant were to pursue this effort, he would open himself to potential federal criminal charges – which would be charges placed on top of the bankruptcy he already faces.

One lawyer summed it up succinctly: “In short, don't do it…play within the rules.”

Staying On Top of a Moving Industry
The reason we are noting this exchange is not as an endorsement of the Avvo site, its content, or its authors/contributors. Indeed, we expressly disclaim any opinion about the thoughts, opinions and other content of the Avvo site and we will not be monitoring it on an ongoing basis. It may from time to time publish content with which we strongly agree or disagree, and we will not be commenting on it either way on a regular basis.

We note this exchange only as a reminder to all business owners to continue due diligence before making a decision. This is especially important when the business is considering financial decisions.

We have watched the Merchant Cash Advance industry grow at an amazing rate since 1998. Now, perhaps more than ever before, it is imperative that a business owner take the time to research and understand all they can about this working capital solution and the various providers who offer them. Education becomes power.

The exchange on Avvo.com illustrates that if a business makes a bad choice regarding a Merchant Cash Advance, it could have very negative effects. The exchange also underscores the value of legal counsel in financial decisions – but we do warn that you never substitute using the services of an attorney or legal counsel with using the opinions found on any online resource.

Make Sure You’re Covered
It is important to remember that a Merchant Cash Advance will not be the same for every business in every situation – exactly the opposite is true. A Merchant Cash Advance is a unique funding product and each situation could offer special circumstances to consider.

To make sure your business is making the right decisions, proper legal counsel and guidance from trusted business advisors is a must. It might start for you with a website offering free advice, but it should not end until you have spoken directly with qualified professionals about the specifics in your situation.

Consider that some free advice about Merchant Cash Advances.

What do you think? Is there a specific incident you can share where a lawyer’s advice helped you to make better business decision