The Merchant Marketplace
Project Summary
The MCA market is a rapidly growing industry, with an estimated size of over one billion annually and projected growth of twenty percent annually over the next 10 years. Our company is well-positioned to capture a significant share of this market, thanks to our experienced management team, who has over fifty years of combined experience in the industry. Our team has developed a proven underwriting model, which allows us to provide financing to a wide range of businesses while minimizing risk.
Our revenue will be generated by charging a percentage of the businesses' future sales, as well as a one-time origination and underwriting fee. Our strategy is to target businesses that have been in operation for at least one year, have a minimum of twenty thousand in monthly sales, and have a strong credit history.
We plan to use the capital raised to increase our lending capabilities, expand our sales and marketing efforts, and continue to build a robust technology platform to streamline our operations and improve the customer experience.
Risks include regulatory changes, merchant default, and market downturns. However, we have developed comprehensive underwriting, risk management, and compliance policies and have a strong plan to mitigate these risks.
We are confident that this funding round will allow us to take our business to the next level, and we look forward to working with our investors to achieve our goals.
| Investment Type | Debt |
|---|---|
| Term | 12 Months |
| Raise Amount | $10,000,000 |
Why Invest?
Investing in a merchant cash advance (MCA) company can offer several benefits to investors. Here are a few key points to consider:
1. High returns: The MCA industry has the potential to generate high returns for investors due to the high factor rates charged on the advances.
2. Growing market: The market for MCAs is growing, with an increasing number of small and medium-sized businesses in need of short-term, unsecured financing. This presents a significant opportunity for investors to capitalize on the expanding market.
3. Low barriers to entry: The MCA industry has relatively low barriers to entry, which can make it an attractive option for investors looking to enter the financing industry.
4. Diversification: Investing in an MCA company can offer investors diversification benefits by providing exposure to a different type of financing than traditional bank loans or bonds.
5. Strong Risk management and compliance: We have a robust risk management and compliance policies to minimize the risks involved in the industry, thus providing a relatively stable return for investors.
Our Guidelines
Adam Schwartz
Adam Schwartz – CEO, has over seven years’ experience building fintech platforms to manage all aspects of the alternative finance industry. These systems include CRMs, underwriting models, investor portals, syndication and servicing platforms, phone systems, apps for both Google and Apple, marketing systems, and more. Adam has self-funded over $10 million of his own capital over the 7 years in state-of-the-art technology which is an ongoing work in progress.
Prior to creating The Merchant Marketplace Corp, Adam was both CEO and CTO of Velocity Group USA, which funded over $200 Million to business owners across the USA in a four-year span.
Adam worked hand in hand with family offices to make sure reporting, scalability, accountable, and transparency were always paramount to the success of the business models. Adam has taken the same approach with The Merchant Marketplace with the intent of making this the most successful approach to fintech to date.
Kevin Harrington
As an original “shark” on the hit TV show Shark Tank, the creator of the infomercial, pioneer of the As Seen on TV brand, and co-founding board member of the Entrepreneur’s Organization, Kevin Harrington has pushed past all the questions and excuses to repeatedly enjoy 100X success. His legendary work behind the scenes of business ventures has produced more than $5 billion in global sales, the launch of more than 500 products, and the making of dozens of millionaires. He’s launched massively successful products like The Food Saver, Ginsu Knives, The Great Wok of China, The Flying Lure, and many more. He has worked with amazing celebrities turned entrepreneurs including, like Billie Mays, Tony Little, Jack LaLanne, and George Foreman to name a few. Kevin’s been called the Entrepreneur’s Entrepreneur and the Entrepreneur Answer Man, because he knows the challenges unique to start-ups and has a special passion for helping entrepreneurs succeed. kevinharrington.tv
David J. Austin
David Austin is the managing partner at Austin LLP, a boutique intellectual property and commercial litigation law Firm. David has extensive litigation, patent prosecution and intellectual property counselling experience, representing clients in contract, patent, trademark and copyright matters.
David is also heavily involved in the alternative finance bar, representing plaintiff firms in all levels of litigation and contract law.
David has a Ph.D. in organic chemistry from Emory University and a law degree from Fordham University, and is licensed to practice law in both New York and California. Prior to becoming an attorney, David was a professor in the Chemistry Department at Yale University where his laboratory developed a novel phage-display drug discovery platform upon which he co-founded Ambit Biosciences. He also served as Director of Medicinal Chemistry at Rib-X Pharmaceuticals (now Melinta Therapeutics).
David’s experience in both academia, industry and law provides him with a unique ability to understand business and market needs.
Paul Boxer
Paul started in the Merchant Cash Advance industry almost 8 years ago as a Chief Marketing Officer for a leading provider of merchant funding. Helping create a professional work environment and leading marketing department he also took upon the role of Director of Business Development. While leading several funding companies to success, he has developed a presence and following within the industry as an industry leader and insider steering the future of this Fintech space. We are honored to have him as our partner and take on the roles of Chief Operating Officer and Chief Revenue Officer.
Previously Paul has helped one of the leading companies in the industry rebrand while helping them go from funding $3.2 million a month to $9.3 million a month in under two years while helping them be named to the Inc. 5000 list.
Rashel
Rashel has proven her commitment to excellence within the fintech and small business financing industry. She brings with her over 15 years of valuable experience and insight to enhance multiple facets of a business, including her expertise in underwriting small business financing.
After obtaining a bachelor’s degree in Business Administration, she hit the ground running, with a passion for business development and risk management and is currently studying for her CFA Level 2. In her career she has demonstrated thoughtful and cohesive underwriting and operational skills, proving to be a valuable asset to her clients and the industry. Through due diligence and reasoned approach, she has guided clients through many business uncertainties and successfully assisted them in navigating industry standards. With a driven mindset and result oriented planning, she has built and rebranded multiple companies, as well as established sound operational and risk policies to guide these entities on a path of future growth and expansion. Rashel brings a world of expertise to The Merchant Marketplace Team and is a true star in the Fintech world.
George Ramirez
George Ramirez is a seasoned collection professional with over a decade of experience in the financial industry. He currently serves as the Director of Collections for Merchant Marketplace, where he leads the Collections and account services Department with recovery efforts on defaulted merchants and establishes preventive measures to curve defaults and mitigate risk.
George’s expertise in the collections industry has helped him to develop and implement effective collection strategies that have resulted in significant improvements in recovery rates. He has a deep understanding of the legal and regulatory frameworks that govern the collections process and works closely with his team to ensure that all collections activities are carried out in compliance with industry standards and regulations.
Prior to joining Merchant Marketplace, George held various collections Manager roles at several fintech institutions, where he was responsible for managing collections and account servicing teams and driving collections performance.
George is a results-oriented professional who is passionate about delivering exceptional results and helping clients to overcome financial challenges. His extensive knowledge of the collections industry, coupled with his strong leadership skills, make him an invaluable asset to the Merchant Market place and a trusted advisor to the management team on ways to improve account servicing and impact recovery rates.
Financial Summary
Investing in a pool of merchant cash advances can be a much better strategy compared to investing in a specific investment because it offers several advantages such as:
Diversification: A pool of merchant cash advances is a diversified investment, as it contains a large number of merchant cash advances from different merchants and different industries. This reduces the risk of default and ensures that even if a few merchants default, the overall portfolio will not be greatly affected.
Low default risk: Merchant cash advances are typically secured by the merchant's future receivables. This means that even if a merchant defaults on their advance, we have a high likely hood of recovery. Additionally, merchant cash advance providers typically only provide funding to merchants with a proven track record of generating revenue over the past 6-12 months, reducing the risk even further.
High returns: Merchant cash advance portfolios offer relatively high returns compared to traditional fixed-income investments.
Professional management: Our merchant cash advance portfolios managed by professional portfolio managers who handle all aspects of the investment, including underwriting, servicing, and collections. This ensures that the portfolio is well-managed and that the investors' interests are protected.
Short-term investment: Merchant cash advance typically have a short-term repayment period which can range from a few months to a year, this allows investors to have a relatively quick return on their investment and enables them to reinvest their capital in other opportunities.
Small investments: Investing in a pool of merchant cash advances allows investors to make small investments in many different companies, which can be a great investment strategy for those who want to spread their risk across multiple borrowers. This approach can be especially beneficial for those who are new to investing or who have limited capital to invest.
Low barriers to entry: Investing in a pool of merchant cash advances also has low barriers to entry, meaning that even small investors can participate and gain access to high-return investments. This is opposed to investing in individual businesses which may require large investments and a lot of due diligence.
Mitigates the effect of specific investment gone bad: Opposed to investing in a specific investment, where a single bad investment can have a significant negative effect on the overall portfolio, investing in a pool of merchant cash advances helps to mitigate the effect of a single bad investment, as the portfolio is diversified across multiple investments.
Overall, investing in a pool of merchant cash advances can be a great investment strategy for those looking for a diversified, low-barrier-to-entry, high-return and professionally managed investment opportunity.
Property Summary
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Market Summary
The merchant cash advance (MCA) market industry refers to the business of providing short-term, unsecured financing to small and medium-sized businesses in exchange for a percentage of their future sales. MCA providers typically offer financing to businesses that may have difficulty obtaining traditional bank loans, such as startups or businesses with less than perfect credit.
MCAs are a popular alternative form of financing for businesses because they are relatively easy to obtain and have a relatively quick approval process. The repayment of the advance is also flexible, as it is done via a small fixed percentage of the business's daily sales, which makes it adaptable to the businesses cash flow.
The MCA market is a rapidly growing industry, with an estimated size of over one billion annually and projected growth of twenty percent annually over the next 10 years. Our company is well-positioned to capture a significant share of this market, thanks to our experienced management team, who has over fifty years of combined experience in the industry. Our team has developed a proven underwriting model, which allows us to provide financing to a wide range of businesses while minimizing risk.
Strategy Summary
There are several strategies The Merchant Marketplace will continue to employe to reach more potential customers. Here are some of our key strategies:
Broker and ISO marketing: We focus on attracting new ISOs / Brokers in our industry, as they are the main source of deal flow in our industry. We not only fund their deals, but help them with education and technology which maintains great ISO relations. We also pay high commissions to maintain their loyalty as well.
Targeted marketing: We focus on targeted marketing efforts to reach small and medium-sized businesses that are most likely to be in need of short-term, unsecured financing. This could include using online and offline advertising, direct mail campaigns, and attending trade shows and networking events in relevant industries.
Referral program: We offer incentives to existing customers who refer new business to the company. This can be a cost-effective way to reach new potential customers, as well as help retain current ones.
Building Partnerships: The Merchant Marketplace creates partners with other businesses that serve small and medium-sized businesses, such as accounting firms, business coaching services, and other financial services providers, to reach more potential customers.
Offer Additional services: We offer additional services to customers, such as business credit monitoring, account receivable financing, and equipment financing. This can help increase customer loyalty, and also attract new customers who are looking for more comprehensive financial services.
We provide a great customer experience: Providing an excellent customer experience helps attract new customers, as well as retain current ones. This includes having a user-friendly website, providing clear and transparent information about the advance, and having a responsive and professional customer service team.
Frequently Asked Questions
What is a merchant cash advance?
Merchant cash advance is a type of financing that gives business owners access to capital quickly and without the need for collateral. Unlike traditional loans, which require a lengthy application process, merchant cash advances are typically approved within 1-3 days, doesn't require lengthy paperwork or based upon a credit check. Instead, the lender takes a percentage of future sales as repayment. The repayments are made daily or weekly, so businesses have more flexibility to pay off their debt over time. Merchant cash advances are especially useful for businesses that need access to capital quickly, and they can give business owners the funds they need to grow their operations.
Why are rates so much higher on a merchant cash advance than a traditional loan?
Merchant cash advance (MCA) rates are typically higher than traditional loan rates for two main reasons. Firstly, MCA lenders do not use credit scores as a factor when approving applications. This means that applicants with lower credit scores can still access financing, but at higher rates to account for the risk that the lender is taking on. Secondly, MCA loans are unsecured and do not require collateral. This makes them a fast and convenient option for businesses, but it also results in higher rates because the lender has a greater risk of not getting their money back. The higher rate helps to offset this risk. Ultimately, merchant cash advance rates are higher than traditional loan rates, but they can provide businesses with access to capital when they need it most.
Why be an investor in Merchant Cash Advance Portfolio?
For the savvy investor, there are numerous benefits to investing in Merchant Cash Advances (MCAs). With high returns and low risk, MCAs offer a great way to diversify your portfolio and unlock powerful new streams of income. MCAs also have the potential for strong returns, with some investors yielding returns as high as 50-80% annually. In addition, MCAs are relatively low risk investments with most of the default risk covered by the merchant. This means the investor has minimal exposure to any potential losses. MCAs are also fast and easy to invest in because of the fast turn around time and constant deal flow.
What are the default rates of a Merchant Cash Advance?
Historically, The Merchant Marketplace has maintained a default rate below 10%.
How can a family office sign up to invest?
We can create one singled pooled account or individual accounts for all the account holders. Either way works for us.
What are the requirements for a company to get approved for a merchant cash advance.
In order to qualify for a merchant cash advance, businesses must meet certain requirements. These include:
- Being in business for at least 12 months
- Generating at least $10,000 in monthly revenues
- Having a valid business checking account
- No open bankruptcies
- No tax liens
It's important to note that these requirements are just the basics; there are additional criteria for approving merchant cash advances as well.
When advancing a merchant cash advance, what are the acceptable reasons we fund a business owner.
If a business owner needs money for payroll, rent, taxes or other debts, we typically will NOT fund these requests. However, If the business owner is looking to expand their business, purchase inventory, acquire new equipment, etc., we find these very good reasons to fund the merchant if they can afford the payments.
How do I get started?
Click on the website here, https://syndication.
Why is this opportunity only available to Accredited Investors?
SEC guidelines currently prohibit us from allowing non-accredited investors to invest with us. Looking for alternative ways to work with non-accredited investors.
When can I start to set returns on my investment?
If you are signing up as a syndicator, you can start to see returns within the first 5 business days of funding your first merchant.
How can I track my portfolio?
We have both a web portal and an app in both Apple and Google play stores that gives you complete insight into your portfolio. Think of is as the “Robinhood” app for the Merchant cash advance industry.
How can I fund my account?
You have multiple options when it comes to funding your account. You can wire, ACH, send us a check, or send money directly from our app or web portal.
Why is a merchant cash advance portfolio a smart investment and a great way to diversify your portfolio?
A merchant cash advance portfolio can be a smart investment for several reasons. First, it offers a relatively high return on investment compared to traditional fixed-income investments.
Second, it is a relatively low-risk investment, as the merchant cash advances are typically secured by the merchant's future credit card sales. This means that even if a merchant defaults on their advance, the investor's principal is still protected.
Third, it is a diversified investment, as a portfolio will typically contain a large number of merchant cash advances, thereby spreading the risk across multiple borrowers.
Finally, merchant cash advance portfolios are relatively easy to manage and maintain, as they are typically managed by a professional portfolio manager who handles all aspects of the investment, including underwriting, servicing, and collections.
Overall, merchant cash advance portfolio is an attractive option for investors looking for a high-return, low-risk, and diversified investment opportunity..
What is our typical process for underwriting a merchant cash advance
The process of underwriting a merchant cash advance typically involves several steps:
Application: The merchant or ISO (Broker) submits an application for the advance, which includes information about the merchant's business, such as the type of business, the length of time in business, and the average monthly sales.
Credit check: We perform a credit check on the merchant to evaluate their creditworthiness. This typically includes a review of the merchant's credit score and credit history.
Background check: We perform a background check on every business owner to make certain that there is no negative information that we would deem an unacceptable reason for funding the merchant.
Sales analysis: We examine the merchant's past revenue to determine the merchant's sales trend and ability to repay the advance. This is usually done by looking at the merchant's banks and credit card processing statements.
Underwriting: We use the information gathered in the application, credit check, background check and sales analysis to make a decision on whether to approve the advance. We will also determine the amount of the advance, the repayment terms, and the fee structure.
Funding: If the advance is approved, we will fund the advance to the merchant.
It's important to note that this is just a loose description of the underwriting process, however, the general idea is to evaluate the merchant's creditworthiness, ability to repay the advance and the revenue generated by the business.
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