The Future of the MCA Industry

Jun 2018

Jan 2025

Today’s small businesses don’t need to rely on big banks for financing options. Over the past decade, there has been a rise in alternative MCA Industry that make it easier and faster for startups and small businesses to find the cash they need when they need it.When business owners consider applying for a merchant cash advance (MCA), it is usually because they are in need of cash flow immediately, have poor credit, or haven’t had success with traditional loan applications. MCAs give business owners flexibility as funds can come through to their bank accounts within days and the transaction requires no personal guarantee. This is because MCAs are not considered loans, so there is no need to put up collateral to receive an advance.Merchant cash providers are strictly offering an immediate cash infusion for a portion of a business’s future earnings through repayment plans or a percentage of upcoming credit card transactions. As credit card use has expanded, this type of lending has become increasingly popular with businesses whose sales often come via card, not cash.As the MCA industry continues to grow, what will the future of MCA lending look like?

Collaboration with Commercial Banks

The success and growth of the merchant cash advance industry have led commercial banks to reevaluate their lending requirements to become more competitive with MCA providers. While banks must maintain strict lending standards, they may begin to partner or collaborate with MCA industry leaders like investors, advisors, or partners.Commercial banks are noticing the simplicity and necessity of offering small businesses quick and easy financing but may not be able to provide it themselves. By working with an MCA provider, they can give their clients additional options that have been vetted by the bank.

Changes in Oversight

One of the main differences between merchant cash advances and other more traditional forms of funding is that MCAs are exempt from state and federal oversight. This means MCA providers with poor reputations can go unchecked and there are no set standards in place for interest rates or procedural best practices.With the recent boom of the MCA industry, it may be necessary for an increase in oversight to help clamp down on lenders who are mistreating clients or to set standards for this growing sector. This would help protect small businesses, as well as lend credibility to those MCA providers that are doing the best work for their clients.

Additional Offerings

Some MCA providers are beginning to diversify their offerings to compete with new financing options offered by prominent names like PayPal and Square. This means some MCA providers may consider offering more traditional loans, lines of credit, and cheaper rates than their larger competitors.In addition, since small businesses are beginning to have more and more confidence in the MCA process, the interest of venture capitalists and other investors has grown. This might mean the creation of new technology and credit score models that may disrupt how financing has previously been regulated.

January 26, 2023

January 24, 2025

2M7 Featured in CanadianSME Magazine: “Ways to Secure Funding for Your Small Business”

2M7 Financial Solutions is honoured to be featured in this month’s CanadianSME Small Business Magazine, with an interview highlighting small business financing advice from 2M7’s CEO, Avi Bernstein. From his insights on the state of the lending landscape, to his expertise on the challenges facing small businesses today – Avi provides insider advice on alternative lending options that can help small businesses secure the funding they need to operate and grow their business.

In the interview, CEO Avi Bernstein discusses the many factors that traditional lenders use to evaluate whether a business qualifies for a loan, and why this digital credit score algorithm method of evaluating businesses, is increasingly resulting in small businesses being denied funding from lenders such as banks and credit unions.“

Rapid shifts in new technologies, increased competition, and the state of the economy have led to an increased need for financing, but it is becoming increasingly more difficult from small businesses to access funding from traditional lenders,” said Avi, when asked about the challenges that small businesses face when it comes to securing funding. “Most small businesses need loans to bridge the gaps during uncertain times such as these, but small business owners continuously struggle to secure working capital.”

For over a decade, 2M7 has been dedicated to leveraging its expertise in the Canadian lending landscape to help as many small businesses as possible to get access to the working capital they need. This dedication has led to the development of a proprietary algorithm which uses a unique approach to evaluate risk and determine credit worthiness – enabling 2M7 to fund businesses that might not otherwise qualify for a traditional loan.

Furthermore, the 2M7 team strives to provide an alternative lending solution that better meets the needs of small Canadian businesses than traditional loans. With minimal requirements and simple terms, 2M7 has designed a straight-forward borrowing option that essentially provides small business owners with a cash advance that is deposited directly into their bank account within 24-48 hours, to use immediately within their business as they see fit.2M7 Financial Solutions continues to be at the forefront of the innovative technologies and processes that are transforming the Canadian financial industry in order to help grow the small businesses that are the backbone of our economy. As the industry continues to evolve, the 2M7 team is committed to continuously improving its flexible funding solutions and working closely with small business owners to better meet their changing needs.

To read the full interview, click here to open page 37 of this month’s digital edition of CanadianSME Small Business Magazine.

January 23, 2019

January 24, 2025

What’s the Difference between MCA and Business Loan?

If you’re a small business owner, you know it can be difficult to maintain cash flow. While there are different financing options on the market, many people might consider a merchant cash advance (MCA) and a business loan to be the same thing. While these are both legitimate options to consider, there are key differences you should know before choosing between a merchant cash advance and a business loan.

Bank Loans are the More Traditional Option

A bank loan is the more traditional financing option and what many people consider when they are starting a business or require additional capital, for example. Once approved for the loan, the bank provides a lump sum of cash in exchange for monthly payments over a set period of time with either a fixed or variable interest rate.

Merchant Cash Advances Have Crucial Differences

The merchant cash advance industry is one of the pioneers in alternative lending options - these are not your traditional business loans.An MCA provides your business with a lump-sum payment, like a loan, but the repayment plan is not structured in monthly installments. Instead, the MCA is repaid using a percentage of future credit and debit card sales drawn directly from your future revenue.MCAs, therefore, do not qualify as a loan and don’t require personal guarantees or a stellar credit score.If your small business needs an influx of capital, consider a merchant cash advance before you visit your bank. If you have questions about the differences between lending options, we are always here to help.

May 11, 2020

January 27, 2025

7 Small Business Trends to Leverage in 2020

The business world is evolving and new small business trends are emerging. Which ones should small businesses adopt for 2020? These seven trends are great contenders.

Embrace Social Media Storytelling

Social media is everywhere these days. With the rise of Facebook Live and Instagram stories, everyone wants video content. Tell your brand’s story with a creative mix of social media.

Think Green and Social

Today’s customer wants to buy from a company that shares their values. Think about a green initiative like reducing waste or adopting biodegradable packaging. Social causes are also popular.

Learn to Leverage eCommerce

eCommerce is finally hitting its stride. Traditional retailers are getting in on the act. Create a great website for your small business and watch your profits soar.

More Technology to Do More

Technology is driving eCommerce, but it’s also driving other parts of your business. Think about how automation could help you keep the books, conduct payroll, and so much more.

Make Your Employees Happy

Businesses today are investing more in their employees. Employee happiness improves productivity and the bottom line. Think about training and development initiatives or a wellness program that will keep them moving.

New Marketing Trends Will Dominate

Digital marketing has finally surpassed traditional marketing. New digital marketing media continue to emerge as well. Think about the rise of voice search or the popularity of audio streaming services as you plan your next campaign.

Personalize Customer Service

Finally, small business owners must realize the importance of customer service. Deliver personalized service to every customer, and you’ll win their loyalty.

Get the Funds You Need

Any of these initiatives could be a big financial undertaking for a small business trends. Get the right financial backing with a merchant cash advance. With the right funds, the possibilities are endless.