Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy | Uber Articles
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Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy

By Daniel Samoohi

Merchant Loans are more and more ubiquitous in today’s society. The current position of the economy and tough credit expectations are major contributors to the raise in funds advances. It is tough for entrepreneurs to get the money that they need with the more and more strict stipulations for normal business loans. Merchant cash advances are a different means of receiving money for everyday business requirements. So how does a merchant cash advance operate? Let us explain

Merchant Loans are a service provided by a lending company to a small business owner that processes credit cards, most commonly in the retail or restaurant industry. The merchant loan financing agent basically advances the small business owner a predetermined sum of cash in exchange for a part of their future credit card receipts.

For instance, let’s check out Jo’s Diner. Jo may not have necessary money ready to pay his workers or to buy new appliances for his kitchen. Say Joe needs 30,000 dollars and he called a Merchant Loan provider for the money.

The lender would look at Jo’s past credit card numbers and find out if he is eligible for the advance. They would figure out an interest rate for the funds advanced. The rate is typically higher than a conventional business loan because the advance is typically provided to entrepreneurs that don’t have the credit or collateral to get money from a conventional bank. If the rate for Jo’s advance is thirty percent then he would be getting the thirty thousand dollars and paying the agent $39,000 in future credit card revenues.

The provider would collect the $9,000 by taking a portion of the daily credit card revenues the business receives. Say the portion the lender takes is 8 percent of daily credit card volume and the merchant received $10,000 in credit card transactions for the day. The merchant cash advance agent would receive $800 (8% of the $10,000). This process would continue until the lender received the full $39,000. This payment process fluctuates with the cash flow of the business. The percentage will be the same so if your business has a slow period, you will be paying less. This is a big selling point for the advance product. Conventional bank loans have a set payment amount, which could be difficult to pay during slow periods. A merchant loan has the feature to follow a change in business cash flow.

A merchant loan is a helpful alternative to a business loan. Some may believe nine thousand dollars is a steep fee to pay but the criteria a entrepreneur must meet for a traditional loan is becoming more and more difficult to attain. A business cash advance is a way of receiving fast and easy money to meet business working capital needs.

Since early 2008 Daniel Samoohi has helped 1000′s of business owners in finding credible providers in order to compare offers for merchant loans. By making providers compete with each other, Daniel also helps businesses in finding great deals for a merchant loan.

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Article Citation
MLA Style Citation:
Samoohi, Daniel "Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy." Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy. 16 Aug. 2010. 8 Jul 2015 <>.

APA Style Citation:
Samoohi, D (2010, August 16). Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy. Retrieved July 8, 2015, from

Chicago Style Citation:
Samoohi, Daniel "Merchant Loans – A Better Way To Acquire Money In Today’s Rough Economy"

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