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With the economy teetering on the edge after the sub prime home loan debacle, merchants are finding it tougher than ever before to get approved for a traditional bank loan. A merchant cash advance may be a ideal answer. A quick turn-around time, reasonable cash advance funding of up to 250,000 dollars, and a flexible payment schedule are all motives for going after this new direction for the funding your business requires.

Still, a merchant would do well to look at more than just the working capital they can obtain. The North American Merchant Advance Association (NAMAA) has guidelines of best working practices which they condone for merchant cash advance companies. If the agent giving you a business cash advance doesn’t adhere to these guidelines, it is probably best to look elsewhere. The practices are as follows:

-Give transparent disclosure of costs - NAMAA does not approve of closing fees as part of the application process of merchant advances but urges that any of these fees be clearly explained and disclosed. The total payback amount should be fully elaborated upon and figured out prior to finalizing the agreement.

-Provide lucid disclosure of penalties - In reality, merchant advances are not considered loans; instead they are regarded as a purchase of future Visa-MasterCard receipts. As such, the entrepreneur can be held personally liable for any funds not repaid if the merchant opts to violate the arrangement.

-Be sensitive to a entrepreneur’s business cash flow - A basic arrangement involves that the merchant repays a determined amount of credit and debit card receipts on a daily basis.

-Advertising materials disclosure - All advertising materials should make it clear that the arrangement is one of factoring, not a loan.

-Keep tabs on your Sales Agents/Brokers - Merchant advance lenders should make sure that their sales agents or brokers are properly representing the program.

-Adequate payoff of open Merchant Cash Advance Balances - if a merchant opts to take an additional merchant advance with a new lender the new company should immediately pay off the prior remainder rather than trusting the small business owner to repay the remainder.

Dating back to early 2008 Daniel Samoohi has aided thousands of business owners find trustworthy lenders in order to review offers for a merchant cash advance. By making lenders compete with each other, Daniel also helps merchants find great deals for credit card factoring.