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Small business owners eagerly anticipate the start of each New Year. Not only is it a great opportunity to reflect on the past year, but it can also be a time for setting strategic goals and making positive changes that can impact the success of the business. One of the primary areas that all small business owners ponder is in terms of their merchant finances. Whether a small business loan has supported the business or alternative business funding such as a merchant cash advance has played a big role, it’s important to know what may be happening in the near future.

6 Merchant cash advance predictions for the New Year

With this in mind, our team of experts at United Capital Source would like to share some important merchant cash advance predictions for 2017.

#1 – Cloud based point of sale systems will be developed with more small businesses in mind.

We’ve come a long ways in terms of the point of sale (POS) systems than are most often used by retailers, restaurants, and hospitality chains. Technology is making point of sale transactions more convenient with smaller cloud-based systems that can be carried around – a far cry from former clunky models sitting on counters. Today, card readers that connect to the cloud enable merchants to process credit and debit card payments quickly. In 2017, merchant credit card payment processors will continue to develop more affordable, highly compact POS units that connect wirelessly for the convenience of small business owners. This will enable more small business owners to participate in merchant cash advance programs.

#2 – Security level enhancement of point of sale systems also improve merchant cash advance processing.

We’ve already begun to see advances being made to protect the data of consumers using credit cards to make purchases. In 2017, we will also see the inclusion of biometric tools that further enhance security measures for credit card processors. The Federal Reserve issued a study last year that indicated nearly 60% of consumers are greatly concerned about the security of technology and this contributes to their use (or non-use) of mobile payments and banking. Biometric scanners (fingerprint, etc.) will increase the perception of security of point of sale technology. This added layer of identification will also protect merchant cash advance payments and prevent fraud for small businesses who use this method to increase cash flow.

#3 – More consumer adoption of touchless mobile payments improve merchant cash advance approval rates.

With the rise of touchless mobile payment systems that allow consumers to wave their credit card near a POS, solutions like Apple Pay and Samsung Pay have emerged. According to Apple Insider, “3 million retailers now accept Apple Pay in the U.S. Worldwide”, and this number is growing daily. Consumers are also connecting their mobile devices and wearables to credit cards to make it even more convenient. Therefore, small business owners will be able to take advantage of this as more merchant payment providers reach out to this market, and getting merchant cash advances will be easier for all.

#4 – Increased mobile and e-commerce buying by customers will require ongoing merchant cash advances.

Small businesses can expect that in 2017 they will be required to have at least the option for consumers to make purchases online or via mobile in advance systems. Consider the rise in the number of online ticket sales for entertainment vs. ticket booth sales over the last few years. The average small business owner will be able to benefit from taking out ongoing merchant cash advances because of increased use of mobile credit cards. Small business loans will also increase in use as rates are expected to be lower or stay the same. The good news is that e-commerce and mobile payment gateways put more cash into the pockets of small business owners by reducing inventory and overhead. Businesses may spend more on advertising, but they can also focus on social media platforms where their customers are making more purchases.

#5 – Rates for merchant cash advances will drop as more small businesses take advantage of them.

It used to be that companies didn’t have to offer a credit card processing option for customers – after all, cash was king. But now, it’s a necessity to have at least one merchant credit card processing option. Most of the standard commercial programs have high fees associated with them. But in 2017, you can expect to see rates lower for merchant credit card companies and merchant cash advances alike. Many of these costs will be passed on to consumers instead of merchants. The competitive nature of merchant cash advance providers will also drive rates down, and help produce a more loyal small business base.

#6 – Having a perfect business credit score will matter less than having a steady flow of paying customers.

Since the recession, bad credit business loan providers have realized that they need to provide options for those with less than perfect credit scores. Just like consumers, many small business owners are still repairing credit histories broken by the bad economy. Merchant cash advance companies are less concerned with FICO scores and more concerned with signing businesses up that have a steady supply of paying customers. Granted, there are still monthly income requirements, but small business owners are validated based on other criteria too, such as length of time in business and repayment history of other debts.

If you are considering ways to reduce your costs going into 2017, think about how you can get the best value from merchant cash advance and small business loan programs designed for your business type. There is no harm in finding out about special programs for small businesses, including those with credit challenges.


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