Alternative Working Capital Solutions. Presenter: Gary Lockwood Moderator: Kelley Spencer

Transcription

1 Alternative Working Capital Solutions Presenter: Gary Lockwood Moderator: Kelley Spencer

2 Overview About AmeriMerchant What is a Merchant Cash Advance Merchant Cash Advance Benefits to the merchant & to ISO s/sales Reps Required Documentation for MCA Merchants To Target Merchant Cash Advance Programs Payback New Product Main Street Business Loans What is Main Street Business Loans When is MSBL a good option States MSBL is available in Required Documentation for MSBL Why now is a good time to offer working capital

3 About AmeriMerchant Leading provider of working capital solutions One of the oldest and most reputable providers in the merchant cash advance industry Founded in 2002 Headquartered in New York City Founding member of North American Merchant Advance Association (NAMAA) Best Practices for MCA Industry Can provide up to $500,000 in working capital Advanced real time reporting system Can advance against all card types Fast underwriting & approval times

4 What Is A Merchant Cash Advance Definition: Merchant Cash Advance (MCA) is an alternative financing solution which offers merchants access to capital based on their monthly credit/debit card sales. Through the purchase and sale of credit/debit card receipts, money is advanced upfront to a merchant and the advance is repaid by taking out a small % of the daily credit/debit card sales until the advance is paid off. Example based on an average credit card processing volume of $75,000/month Program: 1.32 est. 6 months 1.35 est. 7months 1.40 est. 8months Offer Amount $50,000 $50,000 $50,000 Payback $66,000 $67,500 $70,000 Withholding 15% 13% 12% 1.39 est. 5 New business $40,000 $69,500 15%

5 Benefits of a Merchant Cash Advance Benefits to Merchant Higher approval rates than traditional finance products Most small businesses don t have fixed assets to pledge Many merchants have a hard time obtaining loans from banks No fixed monthly payments Works with their cash flow Repayment is made by delivering a fixed % of a merchant s future credit card sales to the purchaser (the MCA Provider) No personal guarantee Some uses for a Merchant Cash Advance Advertising, Expansion, Partner Buyout, Cash flow, Renovation

6 Benefits of a Merchant Cash Advance Benefits to ISO s / Sales Reps High Commissions Obtain high quality merchants Average processing volume $20,000 $22,000/month Typical low risk processing industries: Restaurants Card present environments Merchant Acquirer Friendly SIC Codes Acquire merchants without selling on price and avoid bankcard margin compression Lower merchant attrition / higher retention 70% of merchants renew for additional working capital

7 Required Documentation for Merchant Cash Advance AmeriMerchant working capital application Last 4 months credit card processing statements 2 months if only in business for 2 months Most recent bank statement Driver s license Proof of business ownership Blank, voided check

8 Merchants To Target Process at least $5,000 per month in Visa/MasterCard sales from their customers Credit cards processed daily Average transaction size $500 or less Cards are swiped in person at place of business Brick and mortar locations Merchant owns their inventory (no drop shipping) Batches out their terminal at least times per month Some ideal business types to target*: Restaurants Nightclubs/Bars Day Spas Pizzerias Clothing Stores Liquor Stores Hair & Nail Salons Coffee Shops Pet Supplies/Grooming Sporting Goods Stores Laundromats Florists *while these are ideal business types to start out with, we can review nearly any industry that accepts credit cards for their services and products.

9 MCA Programs Traditional Merchant Cash Advance The majority of merchants will fall into this program Ideal for brick and mortar retail locations with small tickets and daily batching Merchants usually approved for up to % of their average monthly processing volume Pay back within an estimated 6 9 months New Business Program For merchants who have been in business under their current ownership for less than 1 year Qualify for less funds generally about 50 60% of their average monthly processing volume Can be processing for as little as 60 days / 2 months

10 MCA Programs Trial Advance Program Designed for merchants who are lacking in one of our approval requirements: lease/mortgage standing, credit score, small liens Must process at least $10,000/month and have been in business for at least 6 months Qualify for 25 35% of their average credit card volume Quick estimated turnaround: 2 ½ month program Excellent renewal opportunities Platinum Program Factors range between over an estimated 5 10 months Additional upfront fees apply Stricter underwriting requirements

11 Collection Methods and Fees 1) Pass-through Account (PTA): To collect on the payback, a separate business checking account is opened in the merchant s name. The full deposit is diverted into the Pass-through account, where the withholding is applied. The funds are then swept to the business owners original Bank via ACH transfer. $25 monthly maintenance fee for the life of the advance 2) Split Funding: We have the ability to provide merchant cash advances without having the merchant switch processors. This process is seamless and is a very strong selling point. The term for this is called split funding. The percentage we take to repay the advance comes directly off the credit card batch and is sent to our company. The bulk or the rest of the batch/settlement will be sent to the merchant s bank like it normally would. For risk purposes, we typically need to see 2 nights of normal size batches with the split turned on. We then can proceed with our processes of funding a merchant. Fee Breakdown: While no application fee is ever charged to the merchant, a processing fee does apply should they choose to take the advance. In order to recover some of the associated costs of underwriting the fees are applied as follows: for deals $10,000 and over: $295 for deals $5,000 and $9,999: $195 for deals $4,999 and below: $95 Private & Confidential 11

12 Main Street Business Loans

13 Main Street Business Loans Main Street Business Loans We are excited to introduce a new loan product aimed at Main Street Businesses that are unable to receive a traditional bank loan. This product is geared towards businesses that typically would not fit the business type criteria for a merchant cash advance. Features: Average MSBL funding size is nearly double that of a MCA Fixed daily payments No minimum processing volume required Only need to be in business 1 year (540 Fico Score or higher) Considerably less documentation needed than a bank loan Future delivery accepted High approval rates

14 What is a Main Street Business Loan? Definition: an alternative business loan is a short term loan program based on total gross monthly sales volume. Financing up to 11% of the gross yearly sales Fixed daily payments / direct ACH (Monday Friday) Program terms range from 3 10 months Premium pricing available Example based on average gross volume of $75,000/month Program: 1.359/8 Standard Pricing 1.29/5 Standard Pricing 1.19/5 Premium Program 1.15/3 Premium Program 1.299/10 Premium Program Loan Amount $50,000 $50,000 $50,000 $50,000 $50,000 Payback $67,950 $64,500 $59,500 $57,500 $64,950 Daily Repayment $424 $645 $595 $ $324.75

15 When Main Street Business Loans is an option MCA MSBL Limited credit card volume * Frequent batching, low daily transactions * High average tickets and/or future delivery * E Commerce and MOTO * Store front (brick and mortar locations) * * Warehouses, manufacturers,etc. * Home based businesses * Auto Repair and Sales * * Restaurants, retailers, etc. * * Doctors, Lawyers and other Licensed Professionals *

16 States we can do business in Alabama Arizona California District of Columbia Georgia Idaho Illinois Indiana Iowa Kansas Louisiana Maine Maryland Massachusetts Mississippi Missouri Nebraska New Hampshire New Jersey New Mexico North Carolina Ohio Oregon Pennsylvania South Carolina Utah Washington Wisconsin

17 Required Documentation for MSBL Application signed by 51% or more of ownership Last 4 6 months of bank statements (all pages) Driver s license Proof of business ownership Blank, voided check

18 Now Is The Perfect Time To Offer Working Capital Upcoming Holiday Season Holiday sales can amount to 25% 40% of many retailer s annual sales Retailers need working capital now for inventory / advertising / marketing for the holiday season Retailers need to avoid empty shelves at all cost Banks lending requirements are still stringent with small businesses With banks being tighter than ever, we are seeing better credit worthy applicants applying for a Merchant Cash Advance & Main Street Business Loans For these more established businesses with better credit, we can offer a lower cost product than standard merchant cash advance rates

19 Faces of AmeriMerchant Training, Assistance and Agent Support: David Goldberg Director of Business Development (800) x113 Gary Lockwood Director of Business Development (800) x135 Kelley Spencer Business Development Coordinator (800) x138 Submission, Contracts and Customer Support: Brianna Burns Client Account Manager (800) x120 Kelsey Boudette Client Account Manager (800) x195 Private & Confidential 19