ACH vs Lockbox
There are three methods in which a lender can collect his percentage of Visa/MasterCard sales Split funding Automated Clearing House (ACH) Lockbox (sweep acount) The split funding method has already been reviewed in the following discussion here. The other two methods of funding are dependent on whether or not the lender provides that method, and whether or not the merchant qualifies for the method. In an ACH method, the lender simply debits the... Read More
Caution – Underwriting Procedure!
This is a cautionary note to merchants who are obtaining a small business loan from a merchant cash advance company. Sometimes, a lender will produce contracts for a particular merchant before the file has actually been underwritten. Often times, the merchant might be working with a broker who is working on behalf of the lender. The reason lending companies do this is to save time paying for underwriters to work on files for merchants who... Read More
“But I thought credit has no effect on receiving a small business loan.”
Often, small business owners will say that they thought credit has no effect on receiving a small business loan. While credit has minimal effect in receiving funding from a merchant cash advance company, it still does play some part; however, it is far less strict than traditional bank loan programs. An underwriter checks to see if the merchant has any major debt that he owes, and if he does, is he on some sort of payment plan? Many times... Read More
Why do you want my bank statements?
When obtaining a small business loan, merchants often ask why bank statements are needed if the underwriter bases the numbers on project merchant processing. There are two reasons why the underwriter wants to see merchant bank statements: The underwriter wants to see what the merchant’s gross monthly sales are. If the majority of a merchant’s business is Visa/MasterCard then this may limit the maximum amount of money that an underwriting... Read More