Merchant cash advance transactions are big business. In the past few years, the industry has grown from a few providers to what some predict will be an almost 10 billion dollar industry. Search engine results for “merchant cash advance” produce literally thousands of provider results. How do you wade through all of these providers to find the right one for your business? How do you get the best deal? Here’s a quick guide to a successful merchant cash advance transaction.
Only “merchants” can apply. A merchant is someone that owns and operates a business that performs credit card processing functions as a way to accept customer payments. Providers have different requirements regarding the length of time you need to be in business- many also require a certain sales volume for approval. Generally, you’ll need to have at least a few thousand dollars in credit card sales to qualify for a cash advance transaction.
You have to qualify. Cash advances have become a popular method of financing because the approval process is fast and easy. But be careful- just because you’re “approved” doesn’t mean you’ll be able to repay the advance according to the agreement. Many unscrupulous providers have been known to approve businesses they know won’t be able make repayments as scheduled in order to collect the fees and penalties associated with defaulting.
Service agreements set the terms. Once you’re approved for a business cash advance, the provider will send you a service agreement with all of the important information- your advance amount, the “safe” retrieval rate (based on your daily credit card sales volume), and advance fees should all be included in this agreement. Since a merchant advance isn’t a loan, it isn’t subject to lending or usury laws- providers can basically charge whatever they want for services, up to 50% or more of the advance amount in some cases. Be extremely wary of agreements with fees that kick in if sales volume drops below a certain amount (called daily minimum fees) or “balloon” repayment clauses that require payment in full if certain conditions are or are not met.
Repayment is taken from daily sales revenue. You begin repayment the day you receive your advance check, much like a traditional loan. Before you take out an advance, you need to make sure that your current sales volume is able to support the repayment structure specified in the agreement.
What happens next? If you repay your advance according to the agreement, everything is fine. Repayment is usually quick- you should have the advance balance paid off within several months of initiating the transaction. The service agreement governs potential defaults- most agreements contain some kind of a “balloon” repayment clause (see above) or give the provider the authority to place a lien on business equipment or property if you can’t pay back the advance. Providers have also been known withdraw money straight from a business checking account. Before you sign the service agreement, you need to make sure that you know exactly what will happen if you can’t repay the advance according to the terms.
Category: Business Trends
It?s hard to look anywhere these days and not see someone who hasn?t been affected by unemployment and the gloomy economy. With some states experiencing up to a 20% unemployment rate, you often wonder if there is anyone succeeding today? Fortunately, there is. In fact, some businesses are not only succeeding, but thriving as well. For example, the Home Tutoring Industry and educational-based companies are experiencing record growth. Not only is it the right time for a home tutoring business, but the right industry as well.
This is primarily due to the fact that in order for students to excel today, they need to be able to get additional help. With school districts faced with larger class sizes, teacher layoffs, and even some schools canceling summer schools programs, students are faced with obstacles rarely seen before. In order for them to keep up and thrive, they need support and educational assistance. That?s where tutoring from home comes into play. Students get the help they need and most importantly at a price that parents can afford.
As the demand for tutors rises, so does the need for good home tutoring businesses. With the opportunity to not only make a great income, but make a difference in a child?s life, more and more are starting their own home tutoring businesses. It can be a perfect match for teachers and educators, women or men entering the workforce after staying home to care for family, or people who worked in Corporate America for many years and are looking for a change.
By starting your own home tutoring business, you become a tutor broker. Here you manage a network of professional teachers and educators, matching them with students in need of one-on-one in-home tutoring. In a sense you are establishing a home tutoring referral network in your community. The owner of the business, you, becomes a matchmaker, or broker, matching qualified tutors and teachers with children in need of individualized tutoring.
There are numerous programs out there that will help you start your own business. However, there are many things to consider before you make a final decision. What you are looking for is a company that is cost-effective. Now more than ever it?s important to find the right company
that not only offers the best advice, but has everything you need to get started. Therefore, whenever possible look for a company that can provide more than just a book and information. There are some companies out today, such as Home Tutoring Business, that provide not only the how to?s to starting a home tutoring business, but individualized coaching, website
design and optimization, marketing and advertising copy tailored to your new company, specialized accounting software unique to the tutoring industry, etc.
Steer clear of franchises. To be successful you don?t want to have to pay royalties and be at the beck and call of the franchise. As you?ve seen recently with the auto industry, when you are part of a franchise, they still make the decisions for you. You want a business that allows you total control and earning potential.
Finally, find a company that will stay in touch with you even after you purchase their information. Starting a business can be challenging and if you can find a company that will frequently stay connected via newsletters, cards, additional coaching, etc., you will benefit greatly.
About the Author:
Laurie Hurley based in Newbury Park, CA is the President and Founder of Home Tutoring Business, http://www.hometutoringbusiness.com. She has helped more than 100 people establish lucrative tutor referral services in their community. Laurie has been featured in Entrepreneur Magazine, Woman’s World, Redbook Magazine, etc. Laurie also owns her own in-home tutoring company and has seen an unprecedented growth in business since the economic downturn.
It?s hard to look anywhere these days and not see someone who hasn?t been affected by unemployment and the gloomy economy. With some states experiencing up to a 20% unemployment rate, you often wonder if there is anyone succeeding today? Fortunately, there is. In fact, some businesses are not only succeeding, but thriving as well. For example, the Home Tutoring Industry and educational-based companies are experiencing record growth. Not only is it the right time for a home tutoring business, but the right industry as well.
This is primarily due to the fact that in order for students to excel today, they need to be able to get additional help. With school districts faced with larger class sizes, teacher layoffs, and even some schools canceling summer schools programs, students are faced with obstacles rarely seen before. In order for them to keep up and thrive, they need support and educational assistance. That?s where tutoring from home comes into play. Students get the help they need and most importantly at a price that parents can afford.
As the demand for tutors rises, so does the need for good home tutoring businesses. With the opportunity to not only make a great income, but make a difference in a child?s life, more and more are starting their own home tutoring businesses. It can be a perfect match for teachers and educators, women or men entering the workforce after staying home to care for family, or people who worked in Corporate America for many years and are looking for a change.
By starting your own home tutoring business, you become a tutor broker. Here you manage a network of professional teachers and educators, matching them with students in need of one-on-one in-home tutoring. In a sense you are establishing a home tutoring referral network in your community. The owner of the business, you, becomes a matchmaker, or broker, matching qualified tutors and teachers with children in need of individualized tutoring.
There are numerous programs out there that will help you start your own business. However, there are many things to consider before you make a final decision. What you are looking for is a company that is cost-effective. Now more than ever it?s important to find the right company
that not only offers the best advice, but has everything you need to get started. Therefore, whenever possible look for a company that can provide more than just a book and information. There are some companies out today, such as Home Tutoring Business, that provide not only the how to?s to starting a home tutoring business, but individualized coaching, website
design and optimization, marketing and advertising copy tailored to your new company, specialized accounting software unique to the tutoring industry, etc.
Steer clear of franchises. To be successful you don?t want to have to pay royalties and be at the beck and call of the franchise. As you?ve seen recently with the auto industry, when you are part of a franchise, they still make the decisions for you. You want a business that allows you total control and earning potential.
Finally, find a company that will stay in touch with you even after you purchase their information. Starting a business can be challenging and if you can find a company that will frequently stay connected via newsletters, cards, additional coaching, etc., you will benefit greatly.
About the Author:
Laurie Hurley based in Newbury Park, CA is the President and Founder of Home Tutoring Business, http://www.hometutoringbusiness.com. She has helped more than 100 people establish lucrative tutor referral services in their community. Laurie has been featured in Entrepreneur Magazine, Woman’s World, Redbook Magazine, etc. Laurie also owns her own in-home tutoring company and has seen an unprecedented growth in business since the economic downturn.
Article Contributed by Ray Haiber
With the recent passing of the huge economic stimulus package there has been some speculation about whether some of its provisions will create or spur the development of new franchise business opportunities in certain industries like health care or renewable energy. The obvious question is whether major government incentives and investments in these 2 highlighted industry sectors will create sustainable franchise business models after the initial boost from the stimulus spending bill plays out.
In my opinion the answer is that this is a very realistic development given the scope of the stimulus bill and some of stated new policies of the current administration regarding health care and energy. In fact, potential small business opportunities emerging from the stimulus bill are becoming more obvious, (particularly in renewable energy) and appear to have a very good chance to create some viable franchising opportunities for entrepreneurs.
Heath Care
According to what I have read, the economic stimulus package includes nearly $20 billion dollars to help digitize or computerize health and medical records in the United States. I would think this could present some serious potential opportunities for small business owners and entrepreneurs because obviously private companies will become involved in providing services for this enormous and long term project.
Even with the recent news that Sam’s Club and Dell intend to enter this market by selling software to digitize medical records doesn’t mean there will not be plenty of other niche opportunities and markets available to develop and service. According to recent stats only about 17% of doctors offices are currently digitizing medical records. And with nearly 800,000 active physicians in the United States, many with small to medium size practices, their will undoubtedly be opportunities for smaller players to develop business franchising models that can service business opportunities that emerge from this program.
Renewable Energy
From what I have read and heard nearly $60 billion of the $790 billion stimulus bill will be spent on alternative and clean energy projects and other environmental related projects and research. This includes billions of dollars for greening government buildings, weatherizing homes and businesses, and providing significant tax credits and grants to help fund and subsidize renewable energy applications across the board.
Surely this type of massive government investment will almost certainly spawn a number of new franchising concepts to service the emerging business and consumer needs that will be created by this commitment. This would conceivably include the development of solar power franchises that would provide installation of photovoltaic panels for residential and commercial applications. Or green consulting franchises that would provide expertise to commercial businesses on how to “go green” or conserve energy. Or maybe new home improvement related franchise businesses will emerge that specializes in weatherization and residential energy efficiency.
In summary it’s going to be an interesting time to see how the franchising industry will adapt and ultimately capitalize on the potential business opportunities and new markets that will be created and supported by the stimulus bill spending. My guess is that it should ultimately produce some viable and profitable franchise companies that may someday become familiar household names and brands.
About Author:
Ray Haiber has 10 years experience as a professional Arizona Business Broker. View and research franchise opportunities for sale across the USA here including master and area development opportunities.
Categories
Does Anyone Knows Anything?
Article Contributed Guy Kingston
“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones.”
Donald Rumsfeld was widely mocked for his mangling of the English Language, but his analysis of the difficulty of assessing a situation is actually very useful.
As we try to work out what is going on in the world, we face knowns, and known unknowns, and unknown unknowns.
The knowns are the basic laws of economics and the history of all that has happened up to this point.
We know that credit is essential to keep a modern economy functioning and that credit depends on confidence. We know that credit was recently over-expanded due to over-confidence, resulting in a predictable reaction. We know that confidence now is at a low ebb and therefore credit is tight.
All this is fairly elementary. So it is inexcusable for self-styled experts or for those in positions of responsibility to claim that they do not know what is happening or why.
The unknown is where we go from here.
Even that is not entirely unknown: we know, for example, that recessions do end – at least they always have. The unknown is when. Since we know that we do not know, this is a known unknown.
In a straw poll of attendees at the World Economic Forum at Davos, sixteen predicted that growth would return in 2010 – and five predicted that we would be out of recession in 2009!
None of them predicted that the recession would go into 2011 and beyond. Those whose only source of information is the alarmist media might find this surprisingly optimistic. Of course, most of those polled serve on corporate boards and have a vested interest in talking up the economy.
Yet there is absolutely no reason why the worst should not be over by 2010 – so long as no one panics and so long as nothing unexpected happens.
Unhappily, that is where our friends, the unknown unknowns come in.
Everything that has happened in this crisis so far has been foreseeable and predictable – indeed, many predicted it. The unexpected has yet to take a hand – and it might yet.
The classic example of Chaos Theory is the butterfly that twitches it wings in Brazil and thus initiates a chain reaction that causes a hurricane in Texas.
It is a matter of fact, not theory, that small changes in the air temperature over Africa have caused the hurricanes that have devastated the East Coast of the USA to a degree not anticipated by actuarial tables, thus putting the whole insurance industry under unexpected strain. Few of the underwriters would have been able to predict those changes of temperature or would have been aware of their potential impact on business.
We have no right to feel superior. Just as the underwriters were unable to predict those changes of temperature, we are unable to predict what unexpected events, perhaps imperceptible in themselves, will have a major impact on our chances of coming out of recession this year or next.
A Congressman might quarrel with his wife over breakfast and take out his frustration at a Committee that ends up passing a bad economic package as a result.
“For want of a nail, a shoe was lost; for want of the shoe, the horse was lost; for want of the horse, the message was lost; for want of the message, the battle was lost…”
There are an infinite number of such potential variables. We can never see them all.
However, every entrepreneur still needs to make decisions – whether to expand or contract, to buy or to sell, and to save or to invest – that depend on making some sort of educated guess about what is going to happen over the next year or so.
If the last year has taught us anything, it has taught us the need for a degree of humility in making predictions – but it has also taught us that there is no excuse for ignoring the data that is available. Many things are unforeseeable – that this crisis was coming was not one of them.
About the Author
Guy Kingston produces and presents the Mind Your Own Business podcast, offering free business advice to entrepreneurs and business owners. As well as audio podcasts there are more articles like this, compelling videos and a must-read blog. All at www.myobpod.com or you can network and join in discussions on the MYOB Facebook group.