We are getting phone nagged by a company that offers to fund us via our credit card receivables.
Having checked into their site: merchantcashdirect.com and trying to find out particulars, there doesn't seem to be any.
The representative was deliberately vague when questioned about how the system works. Other than they measure 4 months of credit card volume then front us up to 130% and don't charge an interest fee I couldn't get anything else out of the representative.
By the way, they charge a "Factoring Rate" on the amount they would give us. Using that terminology tells me that they are avoiding the Canadian Law mandated interest rate structures.
So, we would get our credit card receivables less the card provider's cut every night on close. So, I don't understand what exactly it is that they are selling?
Other than perhaps using our credit card receivables as collateral for what is really a loan.
When pressed on the Factoring Rate and repayment terms, the representative would only tell me that an associate would get back to me with that info.
Um, no thanks.
Folks, all sorts of alarm bells - as in the spidey sense - are ringing here.
Be very, very careful with any kind of offer of cash up front that seemingly looks too good to be true. In all respects, 99.999% of the time the "deal" turns out to be a really shiny but rotten to the core apple.
Philip Elder
MPECS Inc.
Microsoft Small Business Specialists
*All Mac on SBS posts are posted on our in-house iMac via the Safari Web browser.
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