Beyond FDIC Insurance: The Strength of Direct Business Investments
The ever-evolving landscape of financial investment has birthed an array of investment options beyond traditional banking systems, one of which is Merchant Cash Advance (MCA) investing.
We understand and empathize with the concerns some investors express about the risks associated with investing on a non-FDIC-insured platform. This article aims to provide clarity on this issue, highlighting how Supervest operates and the inherent nature of the investments we provide.
Why it’s not as bad as you might think
Firstly, it’s crucial to understand that Supervest isn’t a bank; rather, it is an investment platform that bridges the gap between investors and businesses seeking short-term capital. The FDIC (Federal Deposit Insurance Corporation) provides insurance for deposits in banks and savings associations, guaranteeing the safety of a depositor’s accounts up to $250,000.
However, this insurance doesn’t extend to investment platforms like Supervest because we don’t hold deposits; instead, we facilitate investments in actual advances.
Your investment exists even without us
The investments you make through Supervest are, in essence, direct investments in businesses. When you invest in a merchant cash advance on our platform, you’re essentially providing a business with capital in exchange for a percentage of their future sales.
This means your investment is a tangible asset – an advance that would continue to exist even if Supervest were to cease operations.
To illustrate, imagine you’re investing in a local bakery through a merchant cash advance. You provide the bakery with an upfront sum of money, and in return, they agree to repay this sum plus a fee from a portion of their daily credit card sales.
This agreement doesn’t cease if the platform facilitating the investment shuts down. The bakery would still have an obligation to repay the advance according to the terms agreed upon.
While it’s true that MCA investments, like all investments, carry some level of risk, Supervest takes extensive measures to mitigate these risks. We employ rigorous underwriting standards to assess the creditworthiness of the businesses listed on our platform, and we only accept businesses that demonstrate a strong potential for repaying their advances.
Furthermore, by diversifying your investments across multiple businesses on our platform, you can spread your risk and increase your chances of achieving consistent returns.
Investing is inherently about balancing risk and reward
While Supervest’s MCA investments are not FDIC-insured, they can offer robust returns that can significantly exceed those of traditional bank deposits. According to data from Cambridge Associates, alternative investments have outperformed public markets over the past 20 years, with an average annual return of 10.2% compared to 7.4% for the S&P 500.
While Supervest isn’t a bank and our platform doesn’t offer FDIC insurance, the investments you make through us are tangible assets with real value. Our commitment to risk assessment, coupled with the potential for high returns, makes Supervest a viable platform for investors seeking to diversify their portfolios and achieve significant long-term growth.
As always, understanding the nature and risks of any investment is key to making informed decisions, and we encourage all our investors to do their due diligence before investing.
You can get started with MCA investing here.