As an ISO, if you are looking for new financial services to offer customers, it’s a good idea to consider ISO registered merchant cash advances (MCAs). Your company works as the bridge between the business owner and the lender, and you can make the process of obtaining the cash advance much easier for companies who need funds right away.
Before you make the decision to offer MCAs to customers, it’s important to learn a little more about this funding option, so you can easily answer any questions the debtor may have. For a merchant cash advance, a business will sell a portion of future sales from debit or credit cards to a lender in order to receive a large lump sum. In most cases, the money is used to take care of daily business operations or take care of debts.
When a businessperson is looking for an ISO registered MCA, he/she will get in touch with the lender to request the loan. It may also be necessary to submit a proposal detailing what the funds will be used for. There’s a high approval rate for MCAs, so it’s very likely the businessperson’s proposal will be accepted. Once this happens, the lender and businessperson meet to negotiate. After the negotiations, the contract is signed, and the working capital is transferred to the businessperson’s account. One of the benefits of MCAs is that the approval process is fast, and business owners can get the funds that they need in as little as 24 hours. In order to pay the loan back, a small percentage of the daily credit or debit card sales goes back to the lender, which means that businesses won’t have to worry about setting aside a certain amount for loan repayment every week or month.
The merchant cash advance requires three parties; the lenders, the business owner, and the ISO. You as the ISO will act at the middleman for this process, which means you can make things much easier for everyone involved. Since you have an extensive list of connections, you can provide these services to several banks, financial institutions, and alternative lenders that are willing to offer MCAs.
When you offer ISO registered MCAs, you can provide what business owners need on your terms, since you won’t be bound by government regulations. You can implement the terms that will help to secure the deal, which is another reason why MCAs can be a beneficial part of your business. This definitely comes in handy for businesses who want to explore lending options that don’t require a high credit score or collateral.
Once a lender and business owner have connected and want to make a MCA agreement with each other, you facilitate communication between these two parties. In some cases, you may be the only way that the two entities speak with each other to make sure that the terms of the MCA are suitable for everyone. You’re also in charge of all transactions, from signing up and being approved for the MCA and paying the cash advance back in credit card payment increments.
Now that you see the benefits of providing MCA to clients, be sure to talk with your financial team about adding this service to your ISO today.