Funding

After contracts have been signed, and the merchant processor has been switched over, the lender usually likes to see that the merchant has been processing for at least one day before funding the business.  During this time, the underwriting will check trade references, landlord references or mortgage contacts, and franchise contacts if applicable.  Some lenders are able to provide funding to merchants who are one month behind rent or their mortgage.  This is usually the most important reference that the underwriter requests, and thus all issues with landlord and mortgage companies should be discussed before the underwriting process begins.  Once everything checks out, the underwriter will ACH or wire the money to the merchant’s bank account.  Only once the money deposits into the merchant’s bank account does the lender begin to take his percentage of the Visa/MasterCard sales.  This completes the small business loan transaction.

Note: Many lending companies can provide merchants with additional capital even before they complete paying back the original funded amount

For more about merchant processing companies.

To read about merchant funding discussions.