22 Dec

Can a Merchant Cash Advance Help Your Small Business?

Cash is to a business what helium is to a balloon. Without a steady supply, you cannot stay afloat — paying your suppliers, keeping your inventory stocked or growing your business. A merchant cash advance might be just what you need to get the capital that is so essential to your operations.

What Is a Merchant Cash Advance?

Many people mistakenly believe that getting a commercial loan from a bank is the only way they can acquire funds. That’s a fine mechanism for larger or more established enterprises or for those with stellar credit. But if you are short on collateral or have poor credit, there is another potential solution: a merchant cash advance.

In this financial product, the lender purchases a portion of your future credit card sales at a discount. You get a large lump sum of cash right after the agreement has been confirmed. In return, the merchant cash advance provider gets a portion of your monthly credit card sales — usually around 8 percent of your total transactions.

Who Doesn’t Qualify for a Merchant Cash Advance?

A merchant cash advance is not a good fit for all businesses. Typically, you will not qualify for this financial vehicle if you have a bankruptcy on file. You also need to have an established credit card payment processing system in place, and your business should have been in existence for at least one year, although there can be some exceptions to this rule.

Things You Don’t Have to Worry About

A merchant cash advance is a sales transaction, not a loan. For that reason, it does not appear on your credit report. In addition, because you do not need to put down collateral, you will not lose it should the worst happen and you default on the agreement.

Easy to Obtain

If you have ever applied for a commercial loan from a bank, you know the extent of the paperwork that is involved: bank statements, tax returns and comprehensive business plans. By contrast, obtaining a merchant cash advance only requires that you provide information about two things: your monthly credit card returns and the amount of time you have been in business. In general, you should have at least $5,000 in monthly credit sales and have been in business for a minimum of nine months.

Fast Response

In many cases, months can go by before a business owner learns if he or she has been approved for a commercial loan. By contrast, merchant cash advances only take a matter of days, usually a week or less, after which time you have immediate access to ready cash.
Response times can be even faster if you complete your application online. In some instances, you can get an answer in a matter of hours. If you are trying to jump at an opportunity or if you need to pay off debts quickly, a merchant cash advance is an option worth exploring.

Easy Approval Process

You might have poor credit, but is your business stable and are your sales regular? If so, you will be pleased by the way merchant cash advances are approved. They focus not on credit but on your company’s performance, generally over the past year.

Collections Based on Your Revenue

Unlike commercial loans that usually have fixed monthly payments, what you send to your merchant cash advance provider will fluctuate to some degree based on your sales during any given month. If your sales spike during the holidays, the provider also gets more; however, ebbs in profits during slow times of the year mean lower payments.

Risks of a Merchant Cash Advance

As with any product for sale on the open market, some merchant cash advance choices are better than others. This is particularly true for merchant cash advance providers because the industry is not strictly regulated. In order to obtain a reputable, transparent product, it is best to take heed of the old adage, “If it seems too good to be true, it probably is.” Vendors that boast 99 percent approval rates and “the lowest fee rates in the industry” deserve special scrutiny.

Finally, if the merchant cash provider does not have a website, this definitely raises a red flag as well as suspicions that the operation might be so fly-by-night that it does not even have a solid infrastructure in place. Much grief can be avoided by doing your homework and choosing a provider with a solid leadership team that has years of experience in the industry. When in doubt, don’t sign or click until you have consulted with someone you trust such as a mentor or an attorney.

Check with the Better Business Bureau and read both positive and negative testimonials from former and existing customers. Take advantage of social media to glean even more information. The more knowledge you have about potential providers, the more intelligent your final decision will be.

When you run a flourishing business, there are many strategies you can adopt to keep customers buying and cash flowing. Great service, innovative products and a payment processing system that automates inventory, customer loyalty and accounting functions are a great start. But when you need a larger infusion of funds in a hurry, a merchant cash advance can be just the vehicle that can bolster your already stable business and catapult you to the next level of success.

05 Oct

Why It’s Never Too Early to Prepare for Black Friday

Memories of the summer sun beating down, as you sat in your beach chair might still be fresh, but the reality is that the holiday season is just around the corner. Taking time now to set the stage for Black Friday is a decision you will never regret.

Keep Up With Your Competition

One of the biggest reasons to start setting a Black Friday strategy in advance is that your competition is probably already doing the same thing. Whether you sell online, at a brick-and-mortar store or a combination of the two, keeping up with your rivals is more important than ever.

That’s because your customers are savvier. And thanks to the Internet and online mega-giants such as Amazon, it’s easier than ever for them to find the best deal. Figuring out ways to rise above your virtual and real competitors is an absolute must, and it’s not going to happen magically as you take your last bite of turkey on Thanksgiving. These strategies require time, attention and often help from professionals.

Identify Your Customers and Engage Them

You may already have a good idea of who frequents your retail store or shops at your e-commerce site. Often, the very nature of your products dictates who is attracted to purchasing them. Thanks to today’s modern point of sale systems or other retail marketing tools, you can take what you may already know about your most dedicated buyers and easily store it in a loyalty database.

Long before the holiday season arrives, you will be able to tap into this gold mine of contacts, making your most valuable consumers aware of upcoming sales and promotions and even obtaining their opinions about what they would like to see you carry during Black Friday and beyond. Complement this with a dynamic social media campaign, and you can remain a step ahead of your competition when the crucial time comes.

Don’t Be Afraid to Get Help

Many business owners are fully occupied with the countless tasks involved in running their enterprise. You may be one of them if you often put necessary administrative tasks or long-term goals on the back burner because you spent your day running from one fire to the next.

A short-sighted management strategy is harmful in a number of ways. For one thing, it raises your stress level into the stratosphere. Moreover, the quality of what you do is probably not as high if you are constantly rushing from one crisis to the next. In the end, you will put off equally important but less glamorous priorities.

For many entrepreneurs, developing marketing strategies and preparing for tax time are two tasks they often put off. Instead of allowing these vital business tasks to languish, hire professional help. Whatever you may spend to enlist the services of a marketing firm or an accountant may pay for themselves many times over in added sales and financial security.

Do Some Advanced Inventory Planning

Once again, your point of sale system can be the star of the show when it comes to projecting what products you want to stock and in what quantities. Instead of making a blind stab in the dark about what items will fly off the shelves and which will languish, your POS solution has the capability of generating reports from last year and/or showing recent trends.

With just a few clicks, you can print out a spreadsheet that shows in clear detail what worked and what flopped. That will certainly make projecting and ordering much easier. And if you couple that strategy with an active social media presence, you can get a sense from your customers about any tweaks they would like to see you make in your offerings. After all, fads and trends take on lives of their own on the internet, and you would be a fool if you didn’t put your ear to the ground in that respect.

Make Physical and Staff Preparations

It’s never too early to start planning what your virtual or brick-and-mortar store will look like during the holiday season. Start moving things around to ensure that the most sought-after products are visible and within easy reach. Begin thinking about how many sales floor and checkout staff you will require for each shift, hiring new people now before the best ones are snatched up by your competition.

The autumn months also provide you with the calm before the storm, a time when you can provide training in sales procedures, the use of your POS solution and the full range of your product offerings. By planning ahead, you will have competent, relaxed staff and products that customers want the moment your doors open on Black Friday.

Optimize for Smartphones

With each passing year, more of your customers are carrying mobile devices. If you have an e-commerce site, be sure that it is set up for mobile phone purchases. Even if you only have a physical storefront, cash in on the smartphone phenomenon by sending location-based messages to your customers when they come within close range of your store. Take the weeks and months before Black Friday to come up with some eye-catching promotions that will entice your loyal customers to heed your notifications and walk or click into your retail arena to take advantage of promotions or discounts. There is so much money to be made via mobile technology that you definitely cannot afford to pass up this important and profitable avenue.

Don’t let your competition jump ahead of you this year. With some careful planning now during the slower months, you can increase the chances of skyrocketing your profits once the holidays get into full swing. If you play your cards right, this year’s Black Friday might take on a decidedly green hue for you and your business.

20 Sep

Five Ways Your Small Business Can Benefit From Back to School Promotions

From kindergarten to college, class will soon be in session for another year, if it isn’t already. Students aren’t the only ones who should prepare. As a business owner, put yourself in an advantageous position by capitalizing on products and services that cater to everyone going back to school.

Put Social Media to Work for You

You can harness the power of social media sites, including Instagram, Facebook, Snapchat and Pinterest, to engage students of all ages. These ubiquitous platforms offer you countless ways to spread the word about your business.

For instance, spark customer interest by sponsoring a “selfie” contest featuring some of your products, with the winner receiving a gift card or shopping spree. Offer coupons to customers who provide you with their contact information. Make the most of your website and social media pages to get people chatting and tweeting about everything you have to offer, and encourage your loyal customers to write reviews. The more buzz you generate, the higher the likelihood of attracting new patrons.

Making your pitch on local social media pages can be particularly lucrative. Post coupon ad discount information, being sure to tag area schools. Once you do, parents will tend to share the news with their friends. Before long, the buzz about your promotions might even go viral in your community.

Tap into the Benefits of User Generated Content

If there is any one group of customers who are savvy about social media, it’s students. Let them show off their online prowess while simultaneously boosting social media interest in the products and services you are offering. Encourage buyers to take videos of themselves choosing and using your products or services. Set up a commerce gallery that allows your customers’ friends to easily click on and purchase what they see. Set up a customer poll to see what products they like best. The hashtags they use will lead to more social media sharing. From your perspective, more is almost always better.

Help Your Customer Save Money on the Products They Want
Most parents – and even students themselves – are reconciled to the idea of making a significant financial investment in products related to a return to the classroom. If you carry basic supplies such as pens, pencils, notebooks and calculators, offer sales and promotions. Even retailers of household décor products can capitalize on young consumers’ desires to make a fresh start and up their study game, whether in the dorm or even in their own bedrooms. Whatever you are selling, consider creating combination packs at discount prices. For instance, bundle a notebook, calculator and protractor together for the young geometry student.
If you own a salon or spa, provide a discount on a haircut and manicure package that will ensure your customers are looking their best for the first day of classes. If you’re not sure what products to highlight, take some time to check out Pinterest and other websites that cater to younger customers. It won’t be long before you know what styles and products are trending for the new back-to-school season.

Now that you have an idea of what products you plan to feature in your promotion, it’s crucial that your target customers receive the word of your upcoming sale. Use social media, email blasts and good old-fashioned marketing techniques such as signage and notices on bulletin boards to create interest and excitement.

Host Events
If your goal is to sell products and increase your base of student customers, one of the best vehicles is to invite them to your shop or restaurant for a specific event. Of course, the nature of the celebration depends on the focus of your business, but examples are back-to-school open houses where door prizes are offered, movie screenings or concerts held in coffee shops or restaurants, or celebrity meet-and-greets in clothing retail shops.

Although young people will come into your place of business ostensibly to take part in the specific back to school event you are sponsoring, they will also automatically be exposed to the products and services you offer. If you combine your party with product discounts good only for that particular day or evening, you are even more likely to gain sales.

Reward Customer Loyalty
As a business owner, one of your chief goals is to encourage patrons to keep coming back long after back to school time. One of the best ways is through a customer loyalty program. Chances are good that your existing payment processing system might even be equipped with the tools to help you get started. With the influx of potential customers available to you during the back-to-school season, there’s no time like the present to get your program off the ground.
People love to earn points and rewards. If you own a restaurant or coffee shop, you can initiate a punch card system that gives students a free latte after 10 visits or results in a discount on their next purchase after they spend a certain amount of money. These types of incentives are great ways to encourage repeat visits. While customer loyalty programs furnish benefits to your patrons, they also give you an ever-growing list of customers and their contact information. As you enhance the scope of your marketing strategy, this gold mine of data can be the foundation of social media and email campaigns as well as providing potential subscribers to your newsletter.

As the doors of elementary, middle, high schools and colleges swing open for another academic year, use this time to reward existing customers, attract new ones and have a little fun. Giving people the chance to enjoy a time of year that can be expensive and stressful will ultimately boost your ongoing popularity with your patrons and keep them coming back long after the novelty has worn off of the new school year.

18 Aug

Keeping Your Restaurant or Retail Business Safe from Hackers

When hackers plunder a business’ internal payment processing systems, the consequences can be catastrophic. The casualties often include the private credit card data of numerous customers, sensitive employee information, and the hacked company’s reputation and bottom line.

While no measures can provide foolproof protection against data breaches, fraud and other criminal behavior, there are definitive steps you can take to safeguard your retail store or restaurant against cyber-attacks.

Take Time to Maintain Strong Passwords

The temptation to make passwords as easy and memorable as possible is undeniable, especially when time is of the essence for busy entrepreneurs and their staff. Unfortunately, taking shortcuts when it comes to passwords is a hacker’s dream, providing criminals with an easy gateway into your system.

As annoying as it may be, it is essential that you take time to create strong sequences of random symbols, case-sensitive characters and multiple numbers. Make sure that you and all of your staff change their user names and passwords at least on a monthly basis, and insist that no passwords are written down near the computer.

Carefully Choose Your Internet Service Provider

Sometimes you get exactly what you pay for. That’s why it isn’t a good idea to simply sign on the dotted line with the cheapest internet service provider you can find. Reputable vendors may charge more, but part of the price is reflected in the more robust security features of the system as well as the availability of customer support representatives who can assist you in the event that a hack has occurred.

Once you have ascertained that your provider has the security features that will help to safeguard your business, you can then make sure you get the connection speeds and affordable price that will help you seal the deal.

Protect Yourself Against Viruses and Spyware

No doubt, you have heard the horror stories. Entire systems can be taken over by bots or spyware and turned into slaves that do the bidding of criminals while simultaneously preventing businesses from accessing their own data. Furthermore, with a single click, an employee can open an email attachment and subject the entire cyber-infrastructure to the onslaught of a vicious and destructive virus.

By installing cutting-edge anti-virus and anti-spyware software, you can minimize your chances of becoming a victim to one of these frightening and debilitating electronic attacks. Furthermore, even the smallest of retailers should invest in a solid network firewall system that monitors and controls all of the incoming and outgoing traffic. Once you have installed this feature, you can receive up-to-the-minute reports of any suspicious activity occurring within your system.

Take Steps to Encrypt Customers’ Data

The less contact that you, the merchant, have with your customers’ credit card numbers, CRVs and expiration dates, the lower your chances of being hacked. That’s because criminals are seeking this valuable information in order to make purchases themselves or sell it on the black market at immense profits.

Thanks to the recent adoption of credit cards equipped with EMV chips, retailers are much less likely to need to store sensitive data. With EMV transactions as well as mobile payments, tokenization technology enables the data to be encrypted and kept secure from customers and merchants throughout the payment transaction process. In fact, only the end company, entities such as MasterCard, Visa and American Express, have the keys to unlock these secure tokens. If you don’t already have a modern point-of-sale system that contains these features, talk to Aperture Payment Solutions about upgrading.

Secure Your Hardware

In addition to sneaking their way into your electronic systems via spyware or viruses, criminals often go for the most obvious pillaging by stealing your electronic property including cellphones, servers, PCs and laptops. In addition to investing in an excellent security system for your property, physically lock down your equipment by securing it to your desk. Just feed a cable through your computer’s Kensington lock port, the metal loop that is found on most PCs and laptops.

While a determined thief can circumvent this precaution, it takes extra time and is often enough to deter the criminal. If you use laptops in the field, there is tracking software available that will allow you to remotely locate your equipment and password protect it from afar.

Keep Your Employees Informed

The more sets of trusted eyes you have monitoring your systems, the better your chances of intercepting criminals before they can do a lot of damage. Periodically update your employees on the latest security threats, and take a few minutes on a regular basis to explain why security precautions are so important not only for the business but also for them personally.

One of your best uses of time will occur if you write out a comprehensive internet usage policy that details what online activities are acceptable and which are prohibited. By ensuring that everyone is on board with this document, you have obtained buy-in from the people who can best be counted on to be your security partners.

Understand Your Merchant Accounts Provider’s Role

While much of the burden of protecting your company’s security from hackers falls on you, your merchant account provider also bears some of the responsibility. Be sure that this vendor complies with Payment Card Industry Data Security Standard (PCI DSS) requirements. If they fail to do so, you could be left holding the financial bag if you are hacked.

Fraud, data breaches and other forms of hacking can quickly bring the business you have worked tirelessly to build to its knees. Don’t allow yourself to be vulnerable to these evil raids that can cost you your well-being, your customers, and even your company itself. Doing all you can to bolster your security fortress is one of the most proactive investments of time and resources you can give to your retail establishment.

14 Jul

The Illusion of Flat-Rate Pricing for Merchant Processing


Both Stripe and PayPal/Braintree charge flat-rate pricing, an increasingly popular cost structure for processors. And it’s easy to see why – simplicity is attractive. Flat rate pricing is easy to understand and it saves merchants from the annoyance of sifting through complex credit card processing statements. There’s no risk of missing some fine print and — at least on the surface – it appears to be totally transparent.

The flat rate pricing illusion

Flat rate pricing is simple. Credit card processing is not. In fact, flat rate pricing isn’t designed to be competitive at all–the attraction comes from the ease in which merchants can understand the structure. It’s a marketing tactic. With all the intricacies involved in credit card processing, it’s all but impossible for processors to charge a flat rate that is competitive while still remaining profitable as a company. Here’s why.

Whether they’re aware of it or not, every transaction a merchant processes incurs three fees:

1. A fee to the issuing bank, e.g., Chase (interchange)
2. A fee to the card brand, e.g., MasterCard or Visa (assessment)
3. A fee to the credit card processor

While assessments are fixed costs, the interchange rate is not. This rate can vary from as low as 0.05% to over 3%. Processors that charge a flat rate need to account for every possible interchange rate. The good thing about flat rate pricing is that there’s no guesswork and it’s easy for a merchant to figure out how much it’s going to cost them to process their payments. Unfortunately this convenience comes at a cost of spending about 20% more than they have to on processing costs.

Stripe and PayPal/Braintree use a fixed percentage of volume pricing structure of 2.9% + $0.30 per transaction. This is on the higher end in comparison to interchange rates, and for merchants with low-ticket transactions that extra $0.30 can be a real burden.
“Interchange Plus” pricing optimizes costs
Quite simply, “interchange plus” pricing means the merchant pays the interchange rate plus a fee to their credit card processor. That fee is usually measured in basis points. Each basis point is 1/100th of a percent.
For example, let’s say you’re a retail business working with a processor that charges 70 basis points for a fee of 0.70%. If you ran a card-present transaction of $50 with an exempt Visa check card, the interchange fee would be 0.80% + $0.15 for a combined rate of 1.5%. That gives you an interchange rate of $0.75 + $0.15 for a grand total of $0.90 for the transaction. That same transaction through Stripe or PayPal would cost $1.75!


Another cost of processing with many flat rate processors is the funding timeline. Since companies like Stripe are technically payment aggregators, it’s not cost-effective for them to maintain the reserve required to fund their clients in a timely manner.

Through PayPal/Braintree, it takes 48 hours to receive your money. With Stripe, it takes eight business days. That’s seven days between purchase and funding, which can become a huge burden for many merchants, and can complicate accounting long-term.

Another thing–aggregators may process payments under one large merchant account rather than having separate accounts for each of their merchants. In this scenario, the money your customers pay through these services does not belong to you. Since the aggregator is the one with the merchant account, it technically owns the money being processed. The service provider then issues a payment to you for the amount of the transaction.

Other payment processors, like Aperture Payment Solutions, will always have you open and own your merchant account, a process that can be as quick as a few hours. For this reason, any money that your customers pay only ever belongs to you, and you’ll receive your money in as little as one day.
With a little education on pricing, business owners don’t have to settle for a flat-rate structure. Even smaller, low-volume businesses and startups should expect transparency, access to their money when they need it, and a full suite of developer tools. Expect more from your processor – you deserve it.

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