Merchant Cash Advance Fails to Reach Target Audience

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MPR believes the Merchant Cash Advance industry's short reach to be partially the fault of the mass media by discouraging the public with headlines of financial disaster.

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Independent Research, Critique, and Information

The most overused catchphrase of 2008, 2009 and 2010 has got to be "banks aren't lending."

According to The Merchant Processing Resource (MPR), there is an alarming disconnect between small business owners and the Merchant Cash Advance industry. With nearly 30 million small businesses in the country, there has been an outcry in recent years for access to cash to operate and expand. An angry public has joined forces with lobbyist groups to place unrelenting pressure on the White House to stimulate lending, a campaign that has achieved little.

And yet MPR's independent research reveals that billions of dollars are actually available to any small business that accepts credit or debit cards as a form of payment, through an alternative financial product known as Merchant Cash Advance (MCA). MCA providers offer cash in exchange for a set purchase of the future credit/debit card sales of a business. Unlike the rigid criteria set by banks, poor credit history does not deter approval and the funds can be received in less than a week's time. MCA providers put approximately 21,000 deals on their books in 2010 alone, an impressive figure but small in comparison to the number of businesses out there still seeking a loan.

MPR believes it to be partially the fault of the mass media by discouraging the public with headlines of financial disaster. The most overused catchphrase of 2008, 2009 and 2010 has got to be "banks aren't lending." It's enough to make entrepreneurs give up searching for capital before they even start. Sean Murray, a MCA industry veteran and contributor to MPR had this to say about it, "It's not that business owners are making the conscious decision to pass on applying for a Merchant Cash Advance, it's that many of them have never heard of it. Of course this financial product may not suit everyone's needs but it's truly incredible that with half a billion dollars funded last year, it's barely making any headlines. Someone's got to spread the message that there are opportunities available and get the economy jump-started again."

Financial disaster may make good news but putting more of this capital into the hands of small business owners could make for an epic rise in employment and growth. MPR is dubbing the stunning failure of the MCA industry to connect with the voracious demand for capital an 'Economic Tragedy.'

MPR, which typically monitors the Merchant Processing industry has always separated itself from commercial affiliations to uphold the pursuit of fair critique. They have been covering the alternative finance sector, particularly the MCA space for quite a while. From what they can tell, $500 Million funded a year could easily be $10 Billion a year. It might not be the right match for everyone but business owners have the right to know it exists.

About The Merchant Processing Resource (MPR)
MPR is the only independent research and news outlet for the MCA industry. They maintain a volunteer staff of industry insiders. Sean Murray is a 5-year veteran of the MCA industry. He currently holds a senior management position at a firm in New York City.

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Brian McDonald, Senior Editor
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