Cash Advance Online
Recently there has been a flurry of negative news articles from Bloomberg and others profiling the negative activities of several Issuers of Merchant Cash Advance. As usual, the political talking heads jumped on the wagon ostensibly to “protect small business owners” from the “predatory practices” of these evil shylocks.
I see plenty of abuse happening in the Merchant Cash Advance industry; Alternative Finance and Fintech have their share of bad players too. In 2018 however, estimates are that only around $15 Billion was issued in Cash Advances to small businesses which is a preverbal “drop in the bucket” compared to all business finance.
When I see blatant contradictions I call bullshit; not that bad stuff isn’t happening but, where is the outrage from these politicians like Rubio and Cuomo against Wells Fargo, Citibank, JP Morgan, HSBC and a list longer than I have space for who have all been CONVICTED of federal crimes in court like, money laundering for drug cartels. Not one perp walk.
There’s a reason why it’s called “Alternative” finance. It’s an alternative to the decrepit, dislocated small business loan industry that has failed to serve and even abused business owners by limiting their options and denying them access to capital through archaic credit profiling.
Small business financing
All of the alternative financing options available to small business owners have been created to answer to increasing demand for working capital sources outside of Banks. Individual investors are stepping in and covering the need for immediate cash advances for millions of merchants to meet their most critical capital needs.
There will always be those trying to take advantage when meeting demand but in the end it’s that very demand which driving small business owners to seek alternative financing options in the first place.