Simple Merchant Funding

Forbes Article

'Money, Money' -- How Alternative Lending Could Increase Your Company's Revenue

Forbes’ Maureen Farrell took a skeptical view of merchant cash advance lending in her January 2008 article Look Who’s Making Coin Off The Credit Crisis, citing the rise of Merchant Cash Advance (MCA) shops as the recession started. In that report she pointed to predatory lenders relieving entrepreneurs of precious capital at annualized rates as high as 70-90%.

However, much has changed on the alternative lending landscape in the five years since Farrell’s opinion appeared. Analysts report that both the cash advance and the invoice factoring sectors are increasing in prevalence and popularity, with business growing in both sectors at double digit levels each year. The Green Sheet estimates the market for merchant cash advances is currently $500-$700 million, with the potential to reach $3-5 billion within the next several years. The market for “factoring” (B2B loans against outstanding invoices) is even larger: Morgan Stanley estimates that factoring produces $13-15 billion per year.

Merchant Cash & Capital (MCC), of New York; and factoring provider and expert Tim Valdez, co-founder of Pavestone Capital, with locations in Fruitland, Idaho, and Salt Lake City. read more