“Bank Loans Down — Merchants Turning To Cash Advances”


Bank Loans Down — Merchants Turning To Cash Advances

Roaming Insights on the Economy

As active correspondents specializing in pecuniary and payment-based matters, we frequently venture into the field. This allows us to directly observe how the “economy” functions, particularly the system of trade and human activity related to goods and services. Interestingly, during our explorations, we’ve noticed a growing interest in “Merchant Cash Advances.

The Current Landscape in Northern California

So it was that we found ourselves making some Northern California rounds, and came across this item in the Santa Cruz Sentinel, which brought us home to one of the key items offered by AVP Solutions: Namely, the Merchant Cash Advance.

The Sentinel’s headline noted that big bank loans to county-wide small businesses were down 60 percent. And of course, this isn’t the only county where that is the case. “Three years after the worst of the recession, lending by the nation’s largest banks to small businesses in Santa Cruz County has grown at a snail’s pace, similar to the state as a whole,” it states.

Views from the Experts

It then quotes Alan Fisher, author of the California Reinvestment Coalition report cited in the article, who “found bank loans to California small businesses in 2012 were off 60 percent from 2007, before the economy crashed.”

“Small businesses normally create two out of every three new jobs in our country but, without banks lending again, we won’t see a strong recovery,” Fisher continues.

Indeed, a significant challenge arises when traditional lenders hesitate to offer long-term loans at fixed rates. This reluctance stems from the anticipation of rising interest rates, especially given their historically low levels.

A Rising Trend: Merchant Cash Advances

One solution cited by the article? “Business owners have been turning to merchant cash advance firms.”  Or MCAs.

Some of the terms cited in the article by these other MCA firms were, of course, more onerous than many traditional loans. AVPS, however, offers easy to work with terms that help many businesses, like yours, get the operating cash they need in challenging times.

How Does an MCA Work?

In the realm of MCAs, here’s how it operates: You offer us a predetermined amount from your upcoming credit and debit card transactions at a reduced rate. Using a seamless automated system, we deduct a consistent percentage from each finalized sale. Notably, this specified percentage remains constant throughout the funding duration, ensuring we receive payment only when you do.

Key Benefits of MCAs

Benefits for you include:

  • No fixed payments
  • No fixed timeframe
  • Completely automated
  • When you receive payment, that’s when we do too.

Take Action

If you’d like to find your own way out of the post-recession-no-bank-loan-blues, give your AVPS rep a call today to see how easy it is to set up a Merchant Cash Advance.

A Side Note on Santa Cruz

And as for Santa Cruz, even if the loans are tough — we still recommend the hiking, surfing, and seafood!