The U.S. merchant cash advance industry is many things, including hugely profitable to advance providers. So much so, in fact, that one of the country’s retail giants is getting into the game.
That’s right. Walmart is now offering MCAs on its website through two programs called Capital by Walmart and Capital for WFS (Walmart Fulfillment Services). Since Aug. 1, the company has begun promising “easy access to cash advance funds and flexible financing solutions” through MCAs. Depending on which program a business owner chooses, they receive the advance through Walmart itself or through a third-party provider.
In it for the money
Whatever positive associations you might have with Walmart from shopping there or being exposed to its relentless advertising, the company appears to be acting as a typical MCA provider. If you get approved for an MCA through Walmart’s in-house program and your credit and debit card business gets slow to the point where you can’t keep up with repayments, “we may debit your bank account,” according to the company website.
Sure sounds like Walmart is in it for profits more than to help American small businesses grow. Which makes sense, given its history of taking on local retailers in this country.
What to do about an MCA dragging down your business
Whether you take out an MCA from Walmart or a company that specializes in cash advances, you could quickly get in over your head. Unfortunately, MCAs are loosely regulated, giving providers ample chances to charge massive interest and suck small businesses dry — along with their owners, in some cases. Your best bet for survival is to work with an attorney who represents businesses against MCA companies.