Amex Merchant Financing

image american express merchant financeAmerican Express has an international reputation for being an advocate for small businesses. The company was honored in June at the Cannes Lions International Festival of Creativity by being awarded the first two Grand Prix awards for its efforts in supporting independent retailers, and for creating social media initiatives such as Small Business Saturday. Last September brought the launch of the American Express Merchant Financing Program, and since then American Express has kept its finger on the pulse of small and medium size businesses and their finances. Founded with the intent to mitigate the challenges of finding access to capital, the Merchant Financing Program comes to the aid of retailers who may be pressed for funds, and has gained overwhelming attention since its inception.

“The overall product can be described as a business or commercial loan program designed for American Express merchants to borrow against their American Express receivables,” explains Raja Sengupta, VP and general manager of Merchant Financing at American Express. American Express has millions of merchant customers in the U.S., a large percentage of which are small businesses. To qualify for Merchant Financing, small businesses must generate $100,000 to $10,000,000 in American Express charges per year, have a two-year merchant tenure with American Express, and no prior account delinquencies.

The Monthly Financing option was designed to help business owners manage cash flow. American Express forecasts monthly receivables for these businesses and then provides them with upfront cash based on that amount, which shortens the wait to collect throughout the month. The program affords small business owners additional buying power, flexibility and savings by allowing early access to cash. In turn, this creates an opportunity for quantity and early payment discounts. For seasonal businesses that experience financial lows and highs, financing minimizes the turbulence of their dollars. When a merchant needs recurring cash to fund overhead, rent, inventory or quarterly taxes, American Express is there to help with 12 monthly loan disbursements of up to $500,000 each.

As an alternative to the Monthly formula, the Annual Financing option is designed to provide a single cash disbursement, equal to 25 percent of projected annual American Express charges of up to $750,000. “It’s great for when a merchant needs to make larger investments like renovating a store, expanding a business, or upgrading equipment,” Sengupta points out. While there is no variable APR associated with Merchant Financing, there is a fixed fee based on financing amount. The fee is six percent of the loan amount for Annual Financing and 0.5 percent of each monthly disbursement. “Repayment is effortless because funds are automatically retained from the business’s American Express charge volume, so an owner doesn’t have to think or worry about missing a payment or bookkeeping,” Sengupta states. “It really provides peace of mind.”

“American Express roots for small businesses and we believe that they help fuel the economy and invigorate communities,” adds Sengupta. “We invest time and resources into understanding our customers and what would really help them manage or grow their business. We strive to make it as seamless of a process as possible, while creating a good customer experience for the merchant.”

Merchants can call 855-298-1209 to learn how to become an American Express merchant, to take advantage of the program, and to learn about other initiatives like Small Business Saturday and Shop Small. American Express also provides a plethora of tools such as blogs, apps and videos for entrepreneurs.