IPayment to launch a merchant cash advance unit
Payments processor iPayment Inc. is getting back into the merchant cash advance business.
IPayment Capital will launch this fall, offering merchant cash advance services directly to small and midsize businesses, the company said in a Tuesday press release.
“In lieu of working with an outside partner, as we’ve done in the past, we will control the entire experience for our customer, delivering a more streamlined and seamless experience,” said Robert Purcell, iPayment’s chief financial officer, in the release.
IPayment has more than 137,000 customers for payment processing and aims to target that audience first for merchant cash advance services, the company noted in the release.
Merchant cash advance relies on a repayment model using a portion of future credit and debit card sales, and the industry has had its ups and downs in recent years as it’s faced growing competition from the rise of the online marketplace model for small-business loans.
New York-based CAN Capital, previously a major player in merchant cash advance, put new deals on hold late last year and replaced its CEO in a shakeup. Last month CAN Capital announced a return to funding loans with a cash infusion from Varadero Capital.
iPayment explored a sale in late 2015 but regrouped, and early this year the Westlake Village, Calif.-based firm rehired former employee Philip Ragona in an expanded role as executive vice president and general counsel.
No specific regulatory body oversees merchant cash advance lending, but despite growing scrutiny from state and federal agencies, some operators have expressed optimism about the industry in the wake of President Trump’s election because of his pro-business stance.