In the past couple of years, the merchant cash advance industry has seen a lot of changes. Years and years ago, the merchant cash advance industry was fast growing, with new merchant cash advance providers popping up every day and fighting for market share among your average small business owners. As they realized that it wasn’t necessarily in their interest to fund every application that came in, they started offering tiered types of programs. There was a low rate, longer term program available to the lowest risk applications. There were still standard programs, where many applications would still be suited for. And then there were starter programs, for the higher risk applications.
Despite extremely high returns on starter programs, most merchant cash advance providers found out that they still weren’t making enough money, so they got rid of those programs. They were coming to find that because of the lower bad debt, they were making more money on premium, low risk deals, despite the lower rates. With traditional lending institutions still sitting on the sidelines, they began to see more applications from merchants who had previously never considered merchant cash advances, due to the cost.
The Era of Premium Merchant Cash Advances
As a result, every merchant cash advance provider has been rushing to gain market share within this subcategory of merchant. This push for premium deals has resulted in merchant cash advance providers ignoring the market that they originally intended to serve, which was your average small business owner. This is disappointing, to say the least. Merchant cash advance providers need to remember the merchants that created the need for our industry in the first place, and find a way to continue serving them.
I understand the need to manage and minimize risk. On the other hand, I am grateful that merchant cash advance provider’s have found a way to cater to more credit-worthy applicants. It has really opened up the market a bit and those premium merchants are better off having affordable working capital available to them.
For Good Credit or Bad Credit
Sure Payment Solutions can help all types of merchants. If you have sub-prime credit, you can get your foot in the door with one of our bad credit business funding programs. If you have excellent credit, you’ll qualify for one of our premium programs and can get the business funding you have been looking for. Whatever the case, you can get started here.