During the term of your investment, you will receive ongoing scheduled fixed payments.
We diversify proceeds across a multitude of Advances to mitigate risk and exposure.
All Advances are secured by Contracts valued at 120-150% of advanced amounts.
MCA financing companies are in need of additional capital because the demand for Advances transcends the available supply of capital. In addition to its direct financing opportunities, United Fundings has also vetted and selected several preferred financing companies interested in the syndication of their deal flow. United Fundings can now access these financing companies and participate in their deal originations. For any syndications, United Fundings will always perform full due diligence and ongoing monitoring of the financing companies deal flow and business.
Through its MCA Funds, United Fundings allows investors to have access to this reliable, and expansive asset class. Advances are diversified across thousands of merchant clients, directly and through syndications with multiple financing companies. In fact, when United Fundings puts their money to work, the maximum exposure the Funds have to any Advance is less than 5%.
As a result of regulatory changes and changing risk profiles, it’s harder than ever for businesses to gain access to the capital they need. Commercial banks have withdrawn from lending to small businesses for a variety of reasons. Additionally, small community banks, which once issued a sizable portion of the nation’s small business loans, are either closing down or consolidating due to the increased costs of regulatory compliance. Additionally, structural barriers that make it difficult for banks to lend to small businesses have also played a part in prompting the banks to leave the small business loan market.
There are over 32 million Small Businesses in the U.S., and, they account for 99.9% of all businesses in the U.S. Currently over 82% of Small Businesses do NOT qualify for traditional banking loans.
While the demand for small business loans has not decreased, the traditional sources for capital has. The high demand for small business loans coupled with the banks’ exit from the market has created a vast void to be filled. A void filled by the unparalleled rise of the MCA financing industry to help those businesses access the working capital necessary to stabilize, maneuver, grow and expand.
For multiple reasons, small businesses are denied traditional loans from banks or the Small Business Association and even if they do qualify, the loan process takes considerable time and many business owners don’t want to (or can’t) wait.
This has led to a build-up in the non-traditional financing market. The MCA financing market is now at over $20 billion dollars annually.
If a business is unable to easily secure a traditional financial solution, the next option is a Merchant Cash Advance. A Merchant Cash Advance is a financial tool that allows a financing company to provide a business with money as an Advance against future revenues of the business.
Money goes into the business and it’s paid back as sales are made and the financing company is usually paid back as a part of every sale (or a daily fixed amount).
MCAs can help businesses expand, solve a short-term financial issue, purchase an asset or equipment, purchase inventory or materials, launch a marketing campaign, repair & maintenance, or assist with other business-related ventures.
While the specific terms of the financings may vary from company to company or transaction to transaction, usually, a “Merchant Cash Advance” transaction is a form of commercial financing whereby the financing company purchases a portion of a recipient client businesses’ future accounts receivable (or revenue stream) in exchange for an immediate payment of money to the recipient — the so-called “Advance”. Merchant Cash Advances, technically, are not loans but rather the sale of revenues which the recipient operating company expects to generate in the future.
To learn about the mechanics of an MCA and invoice factoring, purchase order funding, or equipment financing you can learn more at our United Fundings business website.
Investing in a United Fundings MCA Fund will result in far superior returns relative to the stock market, and with lower volatility. Up until recently, investing in a Merchant Cash Advance Fund has been a tightly-held private sphere only available to private credit firms and hedge funds.
But now United Fundings is bringing this resilient asset class Opportunity to its accredited investors through its MCA Funds via its Secured Notes with high rates of return.
Underwriting and risk management efforts may not be effective. The Merchant Cash Advance industry is unregulated. Regulations could adversely affect commerce.
If the information provided by the Merchant Cash Advance recipient is incorrect or fraudulent, its qualification to receive Merchant Cash Advance financing and the operating results of the Merchant Cash Advance financing company may be harmed.
On top of the intrinsic value that is provided, the high returns offered by the Funds (Secured) Notes far exceed what traditional high yield opportunities can offer in the public markets.
Extending your investment portfolio to Funds secured by alternative investments like Merchant Cash Advances is a way of mitigating risk and fortifying the portfolio against volatility. Merchant Cash Advances have little correlation to the stock market. A combination of traditional investing and Merchant Cash Advance backed investing would offset each other nicely and provide a healthy, balanced return.
At United Fundings, we are highly aware of today’s small business market and environment. We structure our risk tolerance and specific preferences accordingly.
After your review of the documents, if the decision is to proceed with an investment into the Fund, then you would complete and execute the documents and return them to United Fundings along with the monies to be invested. United Fundings would then review the Subscription to determine the eligibility, and, if everything is ok, United Fundings would issue the corresponding Note confirming your investment in the Fund.
Additionally, United Fundings offers ongoing monthly updates on the Merchant Cash Advance industry, as well as quarterly reports on the status of the Funds. MCA-backed investing has never been easier, less risky, or as straightforward as it is through United Fundings.
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