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A Merchant Cash Advance is a type of funding available to business owners in need of immediate access to working capital. Rather than a traditional loan, a Merchant Cash Advance is structured as a lump sum payment to a business in exchange for an agreed-upon percentage of future credit card, debit card or cash sales.

As an investment, Merchant Cash Advances offer a variety of benefits to investors. Due to the nature of Merchant Cash Advances, Investors typically see a higher return on average compared to traditional loans.. Due to a shorter term (ranging from 3 to 14 months) investor capital is returned much faster and regularly. Correlation to traditional public equity and credit markets is typically low.

Merchant cash advances are acquired by applying from a lender. Financial statements are then examined by underwriters in order to verify the applicants current financial circumstance. Once this information has been verified, lenders determine a financial offer for the applicant. While applications are typically more relaxed than traditional loans, the application process still provides a thorough inspection to verify the business owner is able to repay the loan.

A Merchant Cash Advance is not a loan — rather, they are a sale of a portion of future credit,debit card and/or cash sales from a merchant. Therefore, merchant cash advance transactions are not subject to state usury laws that limit lenders from charging high-interest rates.

Due to the speed of the Merchant Cash Advance approval and funding process, Lenders typically apply a higher interest rate to balance their risk vs. potential return. Additionally, lenders are purchasing future receivables and are not secured against any hard underlying fixed assets.

Historically we have seen default rates between 8.5% to 10.5% on the Supervest platform.

Use of a Merchant Cash Advance is decided upon by the business owner. Typically a Merchant Cash Advance is used to purchase inventory, acquire new equipment, or expand their business. In order to secure the lenders investment, Merchant Cash Advances are not typically available to business owners looking to complete payroll, pay rent, or pay debts.

Supervest users have reported returns of 15% to 25%, each investors return may vary based on their individual preset investment deal criteria. Please keep in mind that past returns do not dictate future performance.

Yes, with respect to MCA deals, an investor will not begin to see remittances (interest) until they have fully funded their portion of the deal participation.