The business of merchant cash advances is changing, and ISOs are finding they need to do the same to keep up.

Long considered a niche product ISOs could rely on to add value to a contract, today’s cash advance market is becoming highly competitive and heavily saturated.

On one hand, more merchants are becoming aware of cash advance, which means there’s more demand for it. At the same time, more financial-services providers are offering it, and that means greater competition.

With credit card companies offering cash advance and alternative lending, it can become tougher for ISOs to build loyalty among the merchants who receive them, ISOs and merchant cash advance providers say.

ISOs should rethink their strategies and stay on top of merchants when it comes to cash advance, says Sean Murray, CEO of Raharney Capital, a New York consulting firm that caters to merchant cash advance companies.

“You know the saying, ‘Always be closing?’ Well, you should always be offering merchant cash advance,” he says.

It’s not uncommon for an agent to offer a merchant cash advance in January, then come back to try again in March only to find that 10 other ISOs approached the merchant in February, Murray says. “You can’t just throw it in there casually every few months. You really have to be on them all the time. Everyone is marketing cash advance,” he says.

But opportunities through cash advance still arise. With more merchants signing up for cash advance, ISOs have more chances to set themselves apart themselves by offering it.

Merchants that have pulled through tough economic times appear ready to expand their businesses again. And the traditional means of borrowing against equity in their homes or getting a bank loan isn’t happening, says Mark Cerminaro, senior vice president of sales and marketing for Rapid Advance, a cash advance provider based in Bethesda, Md.

“It’s a very, very unique time in the industry,” Cerminaro says. “We’re seeing a tremendous amount of growth and a lot of merchants who are looking for capital.”

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