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Higher underwriting criteria imposed by cash-advance providers mean some merchants that previously may have qualified for a cash advance no longer are eligible, and independent sales organizations may encounter increased difficulty in getting clients approved, according to industry insiders. Some cash-advance firms have increased the criteria merchants must meet to qualify for an advance because the recession is causing more merchants to encounter financial difficulties (CardLine, 5/28). The more difficult it is to get a merchant approved for a cash advance, the less likely sales agents can sell the advances, says Henry Helgeson, president and co- CEO of Merchant Warehouse, a Boston-based ISO. Merchant Warehouse sales reps "pretty much have stopped selling it at this time because it's so hard to get someone approved," he says. Sales agents understand that their time with clients is valuable, "and they don't want to go in and get documentation and get declined," says Helgeson. Many agents fear a merchant that is declined for a cash advance may become unhappy overall with its service provider, notes Dane A. James, executive vice president of corporate sales at Cynergy Data LLC, a Long Island City, N.Y.-based processor and ISO. "They don't want to risk the core business we have" to try and get a merchant approved for a cash advance, James says. As a result, "the sales people are bringing the product up less and less," he says.
