Though some merchants experienced severe financial difficulties during the recession and some went out of business, many others made prudent business decisions and scaled back spending to remain operational, Glenn S. Goldman, president and CEO of Capital Access Network Inc., told ISO&Agent Weekly last week at the Electronic Transactions Association Annual Meeting and Expo in Las Vegas.

Capital Access owns AdvanceMe Inc., a Kennesaw, Ga.-based merchant cash advance company. Typically, merchants may receive cash advances in exchange for giving the cash-advance company a share of future card receivables.

“Lots of businesses decided not to expand as aggressively” and took steps to remain successful during the difficult economy, Goldman said. “We developed a clear picture of what a truly resilient small business looks like.”


Additional Factors

AdvanceMe considered additional factors during the recession when evaluating merchants with which to sign potential cash-advance agreements, including look for signs a merchant was anticipating problems and making intelligent business decisions, he said.

To manage threats against the business, “did the merchant renegotiate its lease or did they wait and let things happen to them?” Goldman asked.

For example, some restaurant owners that anticipated the difficult market decreased the costs of their food to encourage sales, he added.

As traditional sources of lending and credit became unavailable to merchants during the recession, AdvanceMe experienced an increase in merchants researching alternate forms of business funding, Goldman said, noting not all the merchants that approached AdvanceMe met the company’s tightened underwriting standards.

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