Frequently Asked Questions.
What is Merchant Financing?
Merchant Financing products are small business loans of $5K - $2M offered to eligible businesses that accept American Express® Cards. These loans are offered in 6, 12, and 24 month terms and are secured by business assets, excluding real property and motor vehicles.
Am I eligible for Merchant Financing?
To be eligible for Merchant Financing, your business must:
- Accept American Express Cards (to qualify for 24-month financing, you must have accepted American Express for the past 24 months)
- Have a minimum of $50,000 in annual business revenue
- Have a minimum of $12,000 in annual credit and debit receivables
- Have been in business for at least 24 months
Please note that not all industries will be eligible for Merchant Financing.
How can I use Merchant Financing funds?
Because Merchant Financing is a commercial loan, proceeds may only be used for business purposes. In addition, these funds may not be used to pay dividends to principals or pay off debts to an American Express affiliate, to purchase real estate or fund construction, or for personal, family or household purposes.
What do I need to apply?
Along with your basic contact information, you will be asked to provide the following when you apply:
- Tax ID or American Express Merchant Account Number
- Total Annual Credit & Debit Card Receivables
- Credit Card Processor Name and Number
- Total Annual Business Revenue
- Total Annual Personal Income
- Social Security Number
- Date of Birth
- Percentage of Ownership
- Type of Business Entity
- Business Bank Account Details (bank name, routing number, account number)
You may be asked to provide additional details and documentation depending on your loan amount and repayment plan. A few examples are: business financials (such as tax returns, bank statements, or monthly statements from processors), personal credit score and proof of ownership.
I was told I was pre-approved‐what does that mean?
Pre-approval means your business is qualified and meets our preliminary approval requirements, but it doesn’t guarantee final approval. Approval of your application is subject to there being no material changes to the financial condition or creditworthiness of you and/or your business, fraud review and other conditions.
What loan terms does Merchant Financing offer?
For loans > $35K and ≤ $2M, we offer 6-month, 12-month, or 24-month terms, and for loans ≤ $35K, we offer a 12-month term and may require a personal guaranty. Your repayment options will be determined following a review of the information you provide when you apply.
What’s a fixed fee?
A fixed fee is a percentage of your loan amount and is repaid automatically over the course of your term as part of your total repayment. With Merchant Financing, there’s no interest rate or variable APR.
How is my fixed fee determined?
Your fixed fee is determined by American Express and is based on the creditworthiness of you and/or your business and other factors, including your processing arrangements, referral source, and the length of your term. Fees range between 1.75% and 8% for a 6-month term, 3.5% and 12% for a 12-month term, and 7% and 20% for a 24-month term.
How long does it take to get funded?
We do our best to disburse funds as quickly as possible. Timing depends, in part, on your processing arrangements, repayment method, loan amount, and term. After completing their application, most approved merchants receive funds within 2 days for loans ≤ $35K, 3 days for loans > $35K and ≤ $250K, 5 days for loans > $250K and ≤ $750K, and 10 days for loans > $750K and ≤ $2M.
How do I get my funds?
Your funds will be direct deposited in one lump sum into the business bank account into which you receive settlements for your credit and debit card transactions.
How do I repay?
Your repayment method is determined by American Express and is based on the creditworthiness of you and/or your business and other factors, including your processing arrangements, loan amount, term, and history with American Express. Below are the possible repayment methods:
Repay with debit ACH
A fixed amount will be automatically debited from your business bank account(s) each business day. Fees for insufficient funds may apply.
Repay with receivables
A percentage of your receivables will be used by American Express to repay your loan (every day your business has receivables) and the rest will be sent to your business bank account, as usual. This percentage, also called your repayment rate, is determined in part by the loan amount, term, and volume of transactions at your business, and will remain constant so long as you remain current on your loan. Receivables-based repayment can work in three possible ways:
- Receivables from only American Express transactions
We’ll use a percentage of your daily American Express transactions to repay your loan.
- Receivables from all credit and debit card transactions via split funding
We’ll use a percentage of your daily transactions from all credit and debit cards including Visa, MasterCard, Discover, Diners Club and American Express to repay your loan. We will partner with your payments processor to have them send us the percentage owed.
- Receivables from all credit and debit card transactions via transfer account
We’ll use a percentage of your daily transactions from all credit and debit cards including Visa, MasterCard, Discover, Diners Club and American Express to repay your loan. We will open a temporary transfer account with the transfer account bank on your behalf, to which your payments processor will send your total receivables. From there, Wells Fargo will send us the percentage owed. Please note, this repayment method may be unavailable in Puerto Rico and the Virgin Islands.
Can I repay early?
Yes; there are no penalties for repaying early. In fact, your business could qualify for a rebate on up to 25% of your fixed fee so long as there’s been no default on your loan and the following criteria are met:
- 6-month term: 25% rebate if paid in full within 90 days of disbursement; 10% rebate if paid in full within 135 days.
- 12-month term: 25% rebate if paid in full within 180 days of disbursement; 10% rebate if paid in full within 270 days.
- 24-month term: 25% rebate if paid in full within 360 days of disbursement; 10% rebate if paid in full within 540 days.
What if I’m unable to repay on time?
If you begin to fall behind on your repayment schedule, we’ll help you catch up by increasing your repayment rate. We may also initiate a debit ACH from your business bank account on file for the past due amount, and take other action. In addition, if your loan becomes past due, you may incur a late fee of $39 or 2.99% of the past due amount, whichever is greater.
If, at the end of the term, the outstanding balance of your 6-,12-, or 24-month loan is not fully repaid, the repayment rate will increase to 100% until it’s repaid. We may also initiate a debit ACH from your business bank account on file for the unpaid amount, and take other action.
How do I renew my loan?
You may be eligible to apply for more money once you’ve repaid at least 50% of your loan. The remaining balance of your loan must be paid in full before you can receive your new funds.
To apply for a renewal, please call a Merchant Financing Specialist at 1-855-298-1209, Monday through Friday, 8 a.m. - 8 p.m. ET.