January 2014 – Issue 1

Go to: Previous page | Next page


So, now the question remains: what made RapidAdvance such an attractive target, and is it replicable by other MCA firms?

Investor and former Goldman Sachs investment banker Steven Mandis bought in to RapidAdvance early on, and he says two of the things that set them apart is that they focused on institutionalizing their business including legal and compliance and audited numbers and focused on data analytics for underwriting and marketing. They also focused on technology, and they focused on going direct to the merchants instead of solely through ISOs. These are significant investments.

Those moves helped to change the perception of the company in a relatively short time, he said. By continuing to professionalize their processes and procedures and adding data analytics and direct marketing, they quickly improved the enterprise value of their company.

McGovern agrees that an investment in technology typically sets the best MCA firms apart from the pack. He said the best firms will have very scalable technology that can automate underwriting as well as various aspects of origination and due diligence.

McGovern also said he prefers seeing firms that are using ACH in addition to credit cards.

Gurandiano agrees that strong investment in technology helps differentiate one merchant cash advance company from the rest.

“There is a universe of players who are relatively undistinguished from a growth perspective and a technology perspective, and they are all spoken about in one breath,” Gurandiano said. He added that the outliers are the ones that are doing something different, such as looking for new distribution channels or using technology in a creative way.

For example, Gurandiano said he would be interested if merchant cash advance companies were using social media and technology, not just for marketing, but also to monitor their potential clients.

“Using technology to come up with a better picture of credit quality of the merchant is important – monitor the merchants, and not just their debit and credit purchases, but also using leading indicators that would provide insight into the overall health of the business – whether it is pulling up their UPS feed to see how much they are shipping, for example,” Gurandiano said.

Go to: Previous page | Next page

Go to: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | 33

A special thanks to the magazine's most recent advertisers
Issue #5 | Issue # 4 | Issue #3 | Issue #2 | Issue #1
DailyFunder's CEO Corner
Call us at 646-531-5815