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As the merchant cash advance industry gains popularity as an option to traditional small business loans, more and more companies are popping up across Canada. While most merchant advance services are similar, the companies that provide the service are all over the board. If you’re considering a merchant advance do a little homework and check out the company first.

Always check out the Company

Anyone can set up an impressive website and appear to be much larger and more credible than they really are. Check the local Better Business Bureau, ask for references, and talk to existing customers. Check them out on LinkedIn.

Find out who’s behind the Company

If it’s a big public company you’re usually pretty safe. Your $30,000 advance won’t break them. If it’s privately held, find out who the shareholders are.   What’s their history? How long have they been in business?  Who’s money are they using…their own, the banks, or a bunch of guys that ride motorcycles? Are they financially solid or will they be out of business in 6 months?

Canadian

More and more businesses these days prefer to “keep it local”. If this is important to you make sure you’re picking a 100% Canadian owned and operated provider. Most of the larger merchant cash advance companies in Canada are based out of the US – not that there’s anything wrong with that – but if keeping it local is relevant, Go Canada.

Are you talking directly to the funder?

Make sure you’re talking to the people that a) make the final financing decisions and b) provide the cash.  Many providers use third party re-sellers or “brokers” that are usually commission based, wear cheap suits, have bad hair and don’t care about your business – they just want to make the sale and move on to the next one. Third party brokers also drive the cost up – the fewer hands in the process the better rate you’ll get.

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