The size of the
Merchant Cash Advance Industry is something that many hedge funds and investors have been trying to determine for years. It's important to note that Merchant Cash Flow Loans have become increasing popular over the past year, and while they catering to same target market, they're loans, not advances.
That being said, the volume of true sales of future credit/debit card receivables is probably around $600 million a year or more. In 2010, that figure was estimated to be about $524 million. Merchant Cash Advance is a true loan alternative because it allows small businesses to leverage their future sales to receive cash today. If the business fails, the purchaser of those revenues has no recourse. On the contrary, lenders are not making a bet that a business will perform. Instead, the borrower is required to pay a fixed amount in a fixed time, regardless of their actual sales performance. Merchant Cash Advance resellers are brokering these types of transactions more frequently. It's probably a safe bet to say this product is approaching $200 million a year in volume. Will it soon grow larger than Merchant Cash Advance itself? Time will tell.
