Evaluation Criteria for Merchant Cash Advance

The independent authority on credit card processors, topcreditcardprocessors.com, is a research firm dedicated to identifying and ranking the best credit card processors in the United States. Through an in-depth vendor analysis, client evaluation, and the use of our proprietary evaluation criteria, we have put together a list of the top merchant cash advance services. Our analysis delves into a vendor’s business practices and compares them against industry standards to ensure that the service is quality. Often times we connect directly to the clients of a vendor and ask about their overall experience.

There are five key areas which we have identified as significant for merchant cash advance services:

Finding a merchant cash advance service that provides affordable rates helps to reduce the merchant's overall operating costs. If the cash advance service charges more than a reasonable percentage of the total advance, it only puts the merchant further into debt. Avoiding unforeseen fees and choosing a company that charges only a small percent of the total advance helps the merchant to keep more of their money in their pocketbook.

Calculation methods used to calculate the overall charge of the cash advance fee are taken into account when evaluating a client. This makes sure that the merchant receives a fair value and knows exactly what to expect when requesting a cash advance. Some vendors charge a percentage of the total fees while other merchants charge a set fee per transaction. The process used in calculating and providing the merchant with a cash advance significantly impacts the ability of a merchant to receive value from the cash advance. Longer and flexible payback periods provide the merchant with additional convenience and the ability to budget their finances better.

When requesting a merchant cash advance the availability of customer support becomes a crucial element to the evaluation. Customer support must be available and have the tools necessary to immediately determine overall interest rates, due dates, and any other questions the merchant may have. Providing 24/7 customer support and multiple methods of contacting support helps make the advance more convenient as well.

When a merchant needs an advance, generally it is due to an emergency situation. The efficiency of the company gets tested at this point and merchants that have to wait too long for their advances lose money and time. A merchant cash advance service should be provided immediately to the merchant whenever possible. Funds must be deposited directly into the merchant's account, with little or no delay in receiving the funds.

Account security and the prevention of unauthorized charges becomes an important part of any evaluation of merchant cash advance services. By providing the customer with a secure method of obtaining a transaction and notifying the merchant of suspicious advances, the vendor provides a valuable protective service to merchants.

General Questions:

  • How did you find your current payment processor?
  • What other payment processors, if any, have you used?
  • How many transactions do you process per month?
  • What would be three things you would change about your experience?
  • Rate your overall experience (1-10; 10 being the highest).

Specific Questions:

  • What payment schedule was provided by the cash advance service?
  • What information did you have to provide to become accepted?
  • What was the turnaround time for receiving the funds?
  • Were there any hidden fees or terms you were initially unaware of?
  • Would you recommend this service provider to other businesses in the same position?
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