FAQ

 

MERCHANT CASH ADVANCE FUNDING

WHAT IS A MERCHANT CASH ADVANCE?

Merchant Cash Advances (MCA) is sale of a fixed amount of your future credit card receipts or other sales from your business for an upfront cash advance. The proceeds are paid in a lump sum. The idea is receiving the money immediately as opposed to waiting for the funds from the processing company.

HOW MUCH OF A MERCHANT CASH ADVANCE AM I ELIGIBLE FOR?

We can pre-qualify you with an estimated amount within a matter of hours. There are numerous factors to consider but we lend from $8,000 – $1,000,000’s.  We are typically looking for numerous or consistent historical credit card sales to evaluate cash flow and what you can afford to pay.

WHAT IS THE APPLICATION PROCESS FOR A MERCHANT CASH ADVANCE?

The first step is to do your homework. Merchant Cash Advances are not for everyone.  As Merchant Cash Advances tend to be shorter term funding, 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 funding professional. Our funding 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.

HOW DO I REPAY THE MERCHANT CASH ADVANCE?

WeFund247 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 WeFund247 so there is no concern about late fees.

DO I HAVE TO HAVE CREDIT CARD PROCESSING TO GET AN MERCHANT CASH ADVANCE?

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.

IF IT TAKES LONGER THAN ANTICIPATED TO PAY OFF THE MCA ARE THERE ANY ADDITIONAL INTEREST OR OTHER CHARGES?

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.

HOW LONG DOES THE MERCHANT CASH ADVANCE FUNDING PROCESS TAKE?

Pre-approval can happen within hours, with closing and funding at times next business day if you have all your paperwork together.

DOES A MERCHANT CASH ADVANCE IMPROVE YOUR CREDIT SCORE WITH REPORTING AGENCIES?

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.

WHAT ARE THE ADVANTAGES OF A MERCHANT CASH ADVANCE?

Merchant Cash Advances are much more expensive than traditional banks but, in many instances, it’s the only possibility of funding for entities with short periods in business, poor credit or inconsistent cash flow. With inconsistent cash flow the MCA could be a positive as repayments will be lower during dips in sales as they are predicated on a percentage of the cash receipts.

ARE THERE DISADVANTAGES TO MERCHANT CASH ADVANCES?

Merchant Cash Advances (“MCA”) are expensive. Why? In order to provide the necessary funding to high risk businesses with statistically high default rates there has to be an offset in the form of higher returns on performing funding.

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 lending 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 FUNDING

WHAT IS A REVERSE CONSOLIDATION?

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.

WHAT IS THE REVERSE CONSOLIDATION APPLICATION PROCESS?

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 funding professional. Our funding 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.

HOW LONG DOES THE REVERSE CONSOLIDATION FUNDING PROCESS TAKE?

Pre-approval can happen within hours, with closing and funding at times next business day if you have all your paperwork together.

HOW DOES THE REVERSE CONSOLIDATION WORK?

WeFund247 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.

WHAT ARE THE ADVANTAGES OF A REVERSE CONSOLIDATION?

Depending upon the current debt and available cash flow, future payments may be reduced over those currently being paid while extending the repayment period.

WHAT ARE THE DISADVANTAGES OF A REVERSE CONSOLIDATION?

A Reverse Consolidation doesn’t reduce total debt rather increases it and potentially over a longer period of time.

SECURED DEBT

WHAT IS SECURED DEBT?

WeFund247 Secured Debt Program is often referred to as “hard money” as it is usually secured by real estate. This as opposed to an MCA which is based upon potential collateral in the future in the form of cash receipts or receivables (“soft money”).

WHAT IS THE SECURED DEBT APPLICATION PROCESS?

The first step is to do your homework. Secured Debt is not a panacea.  Secured Debt ties up your asset until the debt is paid off, which may be required for other financial purposes.

Prepare electronic versions of the necessary documentation in advance consisting of details of existing financing, details of the asset to be used including estimated value, current encumbrances, monthly payments if any on the asset, the last 4 months bank statements, your driver’s license and a voided business check.

Fill out the online application and speak with a funding professional. Our funding 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.

HOW LONG DOES THE SECURED DEBT FUNDING PROCESS TAKE?

Pre-approval can happen within hours, with closing and funding at times 1-3 business day if you have all your paperwork together.

HOW DOES THE SECURED DEBT PROCESS WORK?

WeFund247 debits your bank account on a daily or weekly basis (“holdback”) at an agreed upon percentage of your receipts and receivables until such indeterminate time as the total sums are paid off. As Secured Debt are not loans so there is no interest the monies repaid are called a “factor rate.”

Daily funds are transferred between your credit card processor and Fintech so there is no concern about late fees.

WHAT ARE THE ADVANTAGES OF SECURED DEBT?

Secured Debt with non-optimal credit can be much more expensive than traditional banks but, in many instances, it’s the only possibility of funding for entities with a variety of credit challenges. With inconsistent cash flow the Secured Debt proceeds and the repayment method could be a positive as repayments will be lower during dips in receipts as they are predicated on a percentage of the cash receipts.

WHAT ARE THE DISADVANTAGES OF SECURED DEBT?

Secured Debt with non-optimal credit is expensive as compared to traditional banks. Why? In order to provide the necessary funding to high risk businesses with statistically high default rates there has to be an offset in the form of higher returns on performing funding.

The myth of high-risk financing 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 lending 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 Secured Debt is a temporary fix with a potentially positive outcome or is it good money after bad.

CONVERTIBLE DEBT

WHAT IS CONVERTIBLE DEBT?

WeFund247 Convertible Debt Program allows publicly traded companies to borrow funds and secure them with a convertible debt instrument typically carrying an interest coupon. The intention but not always is that the debt eventually may be converted to equity.

WHAT IS THE CONVERTIBLE DEBT APPLICATION PROCESS?

The first step is to do your homework. Convertible Debt is not a panacea as there are potentially significant dilution concerns. 

Prepare electronic versions of the necessary documentation in advance consisting of details of most recent quarterly filings and last annual report, last 2 years audited financial statements, last 4 months bank statements, any other convertible instruments and any outstanding regulatory matters.

Fill out the online application and speak with a funding professional. Our funding 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 quickly.

HOW LONG DOES THE CONVERTIBLE DEBT FUNDING PROCESS TAKE?

Since we are dealing with public entities and potential regulatory issues the process can take from 7-10 days. Time frame will be dependent on your responsiveness including your legal counsel and transfer agent.

HOW DOES THE CONVERTIBLE DEBT PROCESS WORK?

The convertible debt process varies significantly depending upon the company, its financials and stock liquidity. .

WHAT ARE THE ADVANTAGES OF CONVERTIBLE DEBT?

Convertible Debt has dilution consequences but, in many instances, it’s the only possibility of funding for entities with a variety of credit challenges. The advantage of convertible debt is cash received in exchange for paper which provides cash flow without the repayment dipping into to the cash flow.

WHAT ARE THE DISADVANTAGES OF CONVERTIBLE DEBT?

Convertible Debt introduces dilution to all shareholders.

GENERAL QUESTIONS

WHAT IF I HAVE BEEN TURNED DOWN BY A BANK AND BAD CREDIT?

Our lending 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.

WHAT IS THE SOURCE OF FUNDING?

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.

DO I HAVE TO CHANGE BANK ACCOUNTS?

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.

We Are Available

24 Hours a Day

A dedicated funding expert is here to guide you through the process and answer all your questions. We strive to exceed all your expectations. Our professionals explain the requirements and what to expect. Good communication means expeditiously funded.

Phone: 866-680-FUND(3863)

Phone: 203-632-6200

WeFund247.

500 West Putnam Avenue

Greenwich, CT 06830

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