XBS Global now offers American Express Merchant Financing!
Merchant Cash Advances or MCA’s have always struggled with a somewhat “tarnished” reputation. Facts are though, when the chips are down, cash flow is dwindling (DSO is pushing 90 days and longer) and lenders aren’t lending, business owners do what they must to survive. Many of us have been there.
MCA’s are typically sought by merchants who can’t qualify for traditional loan products. Funding amounts are based on historical credit card volume revenues and future estimates. Payments are made from receivables with each merchant batch (transactions grouped together for settlement) - sometimes daily, and vary with settlement amounts. The ease of qualification and quick turnaround of funds come with a steep price – sometimes 30 - 50% APR – maybe higher. We’ve sold the product ourselves– but with reservation. We don’t push or advertise the product. It’s a quick fix in a crisis as compared to a viable finance option for business growth strategies.
XBS Global is excited then to announce our new offering of American Express Merchant Financing. This financing is more like a traditional loan product – without the documentation hoop. Approval turn arounds take 2-5 days and the application is short and simple.
Naturally, applicants must be American Express Merchants – but interestingly – loan amounts can be based on all annual credit and debit card volume as well as American Express tenure. Funding is anywhere from $10,000 to $2 million dollars financed over one or two years.
There is no variable APR or interest rate on the loan. American Express instead charges a flat rate based on amount funded, time financed – and credit history - as low as 8% for 1 year and 14% for two. The payment amount never varies then, and is paid by daily direct ACH debit or lockbox (the batch monies/settlements are transferred to a newly established Wells Fargo account in the merchants name, payment is deducted and the balance of funds is transferred on to the merchants current bank and account).
Here’s another exciting loan characteristic – American Express is giving rebates on the loan fee (flat rate charged) when the repayment is early – as much as 75% of the fee. You don’t get that with the bank.
Merchant Financing combines the cost effectiveness of traditional lending products with the efficiency associated with alternative lending to small businesses. There are no set up or account maintenance fees, historical or seasonal volume fluctuations can be factored into the payments schedule and online loan details, tracking and balances are available.
Oh – and no application fee.
Merchants are using the funds to buy inventory (think bulk discounts), large capital expenditures (remodel or expansions, new equipment) or perhaps even to bridge the gap while awaiting traditional loan approvals.
American Express takes a lot of heat from merchant groups for their payment processing fees despite the fact that the card acceptance is a merchant’s preference. Their unique charge card business model, with its substantial rewards program and award winning customer service however, enjoys remarkable customer loyalty. They stand behind their brand and claim to do the same for small businesses everywhere. Here at XBS Global – we wholeheartedly agree.
If you are an American Express merchant looking for a loan, call us at 1-800-347-1090 or contact us online. We look forward to reviewing your best options with you!