I was asked to blog about this mortgage company because they have some unique offerings for sales people in the mortgage industry. MiG Mortgage offers a FHA Mortgage Net Branch Opportunity for FHA and Commercial loans. You may want to look them over and see if they may provide a fit to you should you be looking for a position of employment. Also, business cash advance

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NetLoanOfficer is a dynamic company that has the resources for many types of business financing from mortgage net branch opportunities, loan orignators,  business loans, merchant cash advance, accounts receivables, inventory financing and something that peaked my interest – business check advance. A business check advance, I’m told is the same product as the merchant cash advance but using a businesses checks that the customer has paid the business for services or products sold. Hmmm, neat idea, I’m sure I will be checking (no pun intended) this out in more detail. Check ou the the website at www.NetLoanOfficer.com

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Well, the cheapest merchant cash loans cost the merchant 1.12 ($10,000 costs $11,200) if paid back evenly over 6 months, the equivalent APR which is the ANNUAL PERCENTAGE RATE is 48% APR.

The much more popular Merchant Cash Advances  usually cost at least 1.35 ($10,000 costs at least $13,500) the corresponding APR would be about 142%+, if structured with an APR!!!

Confusing right?

Yes it is. And supposed to be confusing for the merchant so that they do not realize just how much they are paying back for their short term cash advance.

I will try to explain, with a normal bank loan or credit card where the Annual Percentage Rate is for example 12%, that 12% is charged over 1 full year on the money actually outstanding/owed during that year.

So if you were to keep the full balance, and then pay back the loan in full at month 6, you would of paid a 6% (of the entire amount originally borrowed) cost for that money.

If you pay back all or a portion of the money owed, you are paying the 12% spread over the entire year, and only 12% on the amount actually owed. the less owed at any time, the less you are paying 12% on, you are not paying 12% of the amount that you may of owed the day you took out the loan.

A $10,000 bank loan at 12% APR would only cost you $1,200 if you did not pay back anything the entire year, it would only cost you a full 12% fee of $1,200 per year, if and when you continuously owed the full amount of $10,000 the entire year. Because the 12% APR fee is charged on the BALANCE AMOUNT OWED not on the amount written on the original loan check.

With Merchant Cash Advance however, the Fee of 12% to 45% charged over 6 months is charged as a fee, as if you owed the entire amount without paying anything back the entire term of the loan. Usually paid back over 6 to 9 months not a (annual) year.

When you compare the fees charged on Merchant Cash Advances to what you would pay on a real 12% to 45% APR loan which was paid back evenly over 6 months, you end up with a much larger 48% APR to 142%+ APR bank loan equivalent.

You then have all the additional charges such as Closing Costs, Leases & Processing Fees all stacked together often helping a desperate or unhealthy business fail.

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When it comes to minority business financing, small business owners have few options. Although government programs exist specifically to provide minority business financing, many small business owners can’t or don’t take advantage of them for one reason or another. Small business loan volumes have evaporated as bank lending standards have tightened. Small business owners may be forced to remortgage their homes or other assets just to get the minority business financing they need to operate their businesses.

For some, an ideal financing option is a merchant cash advance from Merchant financing. A merchant cash advance isn’t based on your credit, and it isn’t a loan. With a Business cash advance, you sell a portion of your future credit and debit transactions for cash up front. Your credit is virtually irrelevant because the merchant money is based on the Visa or MasterCard transaction volume of your business.

As the transactions come in, a portion of the sale is used to repay the merchant cash advance. The rest of the transaction cash comes back to you. There are no monthly merchant charge to make, no collateral to put up and no personal guarantees. You get the minority business financing your small business needs, and repayment is a breeze.

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From time to time in life and in business we all need some extra cash to cover expenses. I’m sure we’ve all been there, and I’m sure we will all be there again. That being said, I was interested to learn about a study commissioned by New York based Capital Access Network, Inc (CAN). The Study was conducted nationally among small to mid size business operators who accept credit cards as form of payment. For the sake of brevity I’ll just highlight some key points:

77% of business polled used credit cards to make purchases over $5000 two or more times per year and make only minimum monthly payments.

50% of those individuals did not understand the long term implications of making large purchases on a credit card.

A purchase of $5000 with an 18% APR can amount to an actual cost of $18,000 and would take 46 years to pay off if only the minimum monthly payment is made

73% of those polled were not aware of all of the financing options available to them.

What this study indicates is that business owners are not fully aware of the tools available to them such as business cash advance in times of monetary need. I’d like to do my part in correcting that – if you need money for new equipment, advertising, pay roll, cash flow or anything else and if traditional lending methods are not readily available, you do have another option:

Merchant cash advances are not to be confused with merchant loans, merchant cash advance is simple and they work like this: the cash advance provider purchases (advances you money for) a specified amount of your future credit card sales at a discount. Collection of the purchased credit is processed automatically through your credit card processing provider. The merchant cash advance provider receives a small, fixed and agreed upon percentage of your daily credit card sales. Since it is a set percentage the provider only gets paid when you do – I.E, when you’re really busy your payments are larger and when business is slow your payments are much less. The best part is you’ll know exactly what the total cost of the funding will be upfront. Not like a credit card loan where interest keeps piling up!

It’s quick, easy, predictable and more affordable. For goodness sake, don’t finance your next large project on a credit card–unless of course you want to earn a lot of mileage and can pay the balance off in full in a short amount of time!—

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