Regardless of how money-spinning a business is, a time comes when you’ll need extra liquid cash to cater for huge upfront costs. But loans are not always available when you need them. So instead of hassling to raise the capital you need, there’s the alternative of Merchant Cash Advances. In actual fact, this program isn’t only advantageous to merchants but also presents a wonderful opportunity for agents and ISOs.
If you’ve been the agent linking merchants to funding companies, then MCAs have brought you the chance to boost your profits. And one excellent way is to apply with a company that offers an ISO merchant cash advance program your clients may like.
What are Merchant Cash Advances?
This is basically when a credit card processor purchases a portion/percentage of a business’ upcoming credit card sales, thus giving them advance cash. It is typically a loan guaranteed by future sales.
The merchant is free to utilize this money on any business expenses they like e.g. inventory purchases or opening new branches. You can more readily obtain cash advances than you would secure loans as the processing company automatically takes back the funds from your sales. What’s more, they have fewer risks and have a trouble-free submission process.
How an Agent Can Make Money from this
Working with a partner that offers a great ISO program gives the opportunity to present a creditable deal to clients. And just like all broker deals, you earn a commission out of what your processor makes.
On top of that, some programs will allow you to fund a portion of the deal meaning you can enjoy a much bigger share of the whole profit. Who can overlook the opportunity to partner with such financial institutions?
Then, if your Merchant qualifies for a Cash Advance…
The merchant first agrees what amount of their upcoming credit card sales they wish to sell (equal to amount advanced plus an interest) and then he/she receives the cash up front. From here, the credit card processor automatically deducts a percentage on every sale made or takes a way a portion of the business’ daily sales. Once the advance plus the interest are fully paid, the processor stops retrieving this money.
Most times, you expect to earn your commission upfront. But if you put some of your cash in the deal, you should enjoy interests on these payments according to the ratio you invested.
The Bottom Line
Depending on your hard work and competence, you can now make lots of money off these MCA programs. Just be sure to research on what a processor offers before you begin working for them as a broker.Get Started Now