American Express Merchant Financing is very affordable

Although you need to accept an American Express card to be eligible for Merchant Financing, we think this is a good choice for businesses that need a fast and affordable funding solution.

American Express provides loans to businesses that accept American Express cards through a program called Merchant Financing. This loan combines some of the best features of bank and online loans. You can borrow more than offered by online lenders without compromising the speed of funding, and you can get an annual percentage rate (APR) that is closer to what a bank loan provides. Therefore, we think this loan program is best suited for borrowers who can qualify for bank loans, but need fast short-term loans.

If your business accepts American Express credit cards, and you need funds, you should consider a loan from the American Express Merchant Financing program. We think this loan is ideal for business owners who can qualify for traditional bank loans, but need fast and affordable funds for short-term working capital needs.

Advantages of Using American Express Merchant Financing

As we stated above, American Express Merchant Financing is recommended for business owners who can qualify for a bank loan, or only a few who qualify, but need funds quickly and without pain. Trader Financing is almost a hybrid between traditional bank loans and online business loans, offering the best of every type of financing. This is because you can borrow large amounts of money at a reasonable interest rate, but you also benefit from the speed of financing that is common with online lenders. This means a loan amount of up to $ 2 million, an annual percentage rate of around 11% and 25%, and funding as soon as the next working day.

Although you need to make daily payments on loans, American Express provides a lot of flexibility in how you pay. You can choose between paying by dividing funds, transferring accounts, or debiting ACH payments from your business bank account. Separate funding allows American Express to partner with your payment processor to take loan payments from your daily credit card receivables. With a transfer account, American Express will set up a settlement account with Wells Fargo on your behalf. Your credit card processor will send your daily receivables to this account, and then American Express will take a portion of these receivables before releasing the remaining funds to your business bank account. With the ACH debit payment option, American Express will automatically debit your business bank account every day.

American Express also offers an early repayment discount of either 10% or 25% depending on how early the loan balance is paid after disbursement. For example, you can receive a 25% discount if you pay a full loan six months within 90 days after disbursement.

Cons of Using American Express Merchant Financing

This loan is not suitable for businesses that do not work with American Express or process many credit card transactions. If you want to get financing through this program, you must have a merchant account at the company and accept American Express credit cards, and your business needs to process at least $ 12,000 in credit and debit card receivables every year. For a two-year financing option, you must have an American Express merchant account for a minimum of two years to qualify.

American Express is looking for borrowers with good and excellent personal credit. Although this means they can offer competitive rates, it also means that borrowers with average or below average loans are unlikely to be eligible. We recommend that borrowers with substandard loans consider online or alternative lenders with relaxed credit requirements, such as Kabbage, OnDeck or Credibly.

Daily repayments can make it difficult for seasonal businesses or any business that does not have a regular cash flow cycle. You may also have difficulty being approved if you cannot show strong and stable cash flow. We recommend considering financing options that allow monthly payments.

Last thought

For American Express merchants, this is a good loan option. You can borrow more than what most online lenders offer, but still receive competitive rates and fast funding. You can also receive a significant discount on your loan to pay it off early. However, if you don't have a merchant account with American Express and don't want to set it up, or don't process a lot of credit card transactions, you should look elsewhere for financing. In addition, seasonal businesses or businesses with irregular cash flow cycles can find daily payments unmanageable.