FAQs
MERCHANT CASH ADVANCE 800funding
The first step is to do your homework. Merchant Cash Advances are not for everyone. As Merchant Cash Advances tend to be shorter term 800funding, you need to make certain the business prospects are sufficient to afford the cash flow.
Prepare electronic versions of the necessary documentation in advance consisting of the last 4 months bank and credit card processing statements, your driver’s license and a voided business check.
Fill out the online application and speak with a 800funding professional. Our 800funding professionals can answer all your questions and provide the rates, terms, payment structure and setup an online closing.
Once you receive final approval you can setup an online closing and funds transferred to your account in as quickly as same business day depending upon the time of day and day of the week.
800funding debits your bank account on a daily basis (“holdback”) at an agreed upon percentage of your daily credit card or other receipts until such indeterminate time as the total sums are paid off. As Merchant Cash Advances are not loans so there is no interest the monies repaid are called a “factor rate.”
Example: Receive advances of $10,000 at a factor rate of 1.4. Meaning, $10,000 proceeds received multiplied by a factor rate of 1.4 equals total to be paid of $14,000. The daily debits are an agreed upon percentage of your daily receipts. The percentage of credit card receipts generated each day are applied to the total amount to be repaid until such time as its paid in full. Accordingly, there is no fixed term.
Daily funds are transferred between your credit card processor and 800funding so there is no concern about late fees.
No. Merchant Cash Advances are “advances” not loans and there is no interest rate as the payoff schedule is indeterminate. We are purchasing without recourse to you a specified amount of your future receivables at an agreed upon discounted price for however long it takes to pay it off. We assume the risk in the event that anticipated receipts are not as expected.
No. As payments are made automatically by debits directly through the credit card processor there is no risk of payments in arrears. Although providing a future lender proof of your successful repayment can always be a positive in their credit decisions.
No. We focus on your future business cash flow from whichever sources the funds are derived such as checks, cash, receivables, etc. In such case payments are made from your business checking account.
Merchant Cash Advances (“MCA”) are expensive. Why? In order to provide the necessary 800funding to high risk businesses with statistically high default rates there has to be an offset in the form of higher returns on performing 800funding.
The myth of MCA is for failing businesses is inaccurate. Many new, growing or cyclical businesses find themselves starved for credit, as banks lack the appetite for risk when 800funding at low interest rates. Unfortunately, many then resort to piling on personal credit card debt. Once maxed out and credit scores plunging the options are slim. But only you know if the MCA is a temporary fix with a potentially positive outcome or is it good money after bad.
REVERSE CONSOLIDATION 800funding
A Reverse Consolidation are funds advanced for the purpose of supplementing payments for multiple existing merchant cash advances. The objective is to lower payments and extend the period of repayment to ease cash flow.
The first step is to do your homework. Reverse Consolidations are not a panacea. Reverse Consolidation are merely increasing the debt load but expanding the time to pay. You are using new monies to pay old debt.
Prepare electronic versions of the necessary documentation in advance consisting of details of existing MCAs, the last 4 months bank and credit card processing statements, your driver’s license and a voided business check.
Fill out the online application and speak with a 800funding professional. Our 800funding professionals can answer all your questions and provide the rates, terms, payment structure and setup an online closing.
Once you receive final approval you can setup an online closing and funds transferred to your account in as quickly as same business day depending upon the time of day and day of the week.
Pre-approval can happen within hours at times next business day if you have all your paperwork together.
800funding debits your bank account on a daily basis (“holdback”) at an agreed upon percentage of your daily credit card or other receipts until such indeterminate time as the total sums are paid off. As Merchant Cash Advances are not loans so there is no interest the monies repaid are called a “factor rate.”
Example: Receive advances of $10,000 at a factor rate of 1.4. Meaning, $10,000 proceeds received multiplied by a factor rate of 1.4 equals total to be paid of $14,000. The daily debits are an agreed upon percentage of your daily receipts. The percentage of credit card receipts generated each day are applied to the total amount to be repaid until such time as its paid in full. Accordingly, there is no fixed term.
Daily funds are transferred between your credit card processor and Fintech so there is no concern about late fees.
Depending upon the current debt and available cash flow, future payments may be reduced over those currently being paid while extending the repayment period.
A Reverse Consolidation doesn’t reduce total debt rather increases it and potentially over a longer period of time.
GENERAL QUESTIONS
Our 800funding criteria are primarily based upon your future business credit card receipts with a look back at the historical credit card and other receipts. Therefore, it’s not based on your personal ability to make timely payments. So bad credit is not a primary concern.
We are privately held institutional investors and accordingly we have our own portfolio capital to invest, with full decision-making authority, giving us flexibility in making credit decisions not commonly available to banks or brokers.
Nothing changes from your day to day processes. When we fund, the money is wired to your agreed upon account. When we receive our daily debits we do so from such account where your credit card receipts are debited, if credit cards are your primary source of sales.