Merchant Cash Advance Deal Tracking Metrics
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Want to know the key metrics you track on a merchant cash advance deal? See attached slides for the scenarios and key metrics you want to track in a funded deal.
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Merchant Cash Advance Deal Tracking Metrics
- 1. Copyright 2013. Five Components, Inc. All Rights Reserved www.mcasuite.com MCA Suite Deal Tracking Metrics August 2013
- 2. Use Case: Single MCA Deal Contractual Stage § Funder funds Merchant for $1,000 at a 1.22 factor (payback $1,220). § Funder charges $50 administrative fee for processing the Cash Advance. § Funder’s actual out of pocket cash for the Deal is: $950, which is the what Funder stands to lose if Merchant defaults immediately. § Funder is expected to pay $50 commission for funding the Merchant. Post-Funding Stage § Merchant repaid: $555. § Amount outstanding for the deal is: $665. § Funder paid $25 in commission. § Cash exposure is: $395, Funder stands to lose this amount if Merchant defaults. § Expected Deal Revenue (to make from the deal) is $220 § Net Deal Revenue (minus expenses) is $245 (because only $25 of the $50 commission has been paid to a third party) Copyright 2013. Five Components, Inc. All Rights Reserved 2
- 3. New Deal Tracking Labels & Definitions For Single Deals Copyright 2013. Five Components, Inc. All Rights Reserved 3 Total cash advance given to the Merchant Commission owed to a third party Expected revenue from the deal Actual revenue from the deal Commission paid to a third party Total unpaid principal from Merchant on the current deal
- 4. Single Deal Tracking Equations Copyright 2013. Five Components, Inc. All Rights Reserved 4 Net Advance Amount (it will be different in a refinance deal) Sum of All Scheduled Payable Commission Expected Payback [minus] Net Advance Amount [minus] Scheduled Payable Commission Actual Expected Payback [minus] Net Advance Amount [minus] Commission Paid Sum of All Settled Commission Net Advance Amount [minus] Amount Repaid
- 5. Use Case: MCA Deal Refinance Original Deal § $1,000 for $1,220 with an administration fee of $50 ($950 cash). § Merchant repaid $555 of the $1,220 (Amount Outstanding: $665). § Cash exposure is: $395 ($950 minus $555) Refinance Scenario § Merchant asking for another $1,000 at 1.22 factor. § Funder funds Merchant for another $1,000 with a $45 administrative fee ($955 new money infusion). § Funder’s cash exposure after funding the refinance is $1,350 ($955 of the new money plus $395 from the Original Deal). § Consolidated Deal Revenue (revenues from both deals) is: $656.30 ($411.30 for the current deal plus $245 from the previous deal) Copyright 2013. Five Components, Inc. All Rights Reserved 5
- 6. Newly Refinanced Deal That Include Balance From Previous Deal Copyright 2013. Five Components, Inc. All Rights Reserved 6 Total cash advance given to the Merchant at the time of funding (new cash infusion plus exposure from previous deal) Principal owed from previous deal (before refinance) The new cash infusion provided to the Merchant Total cash exposure including refinanced deals Total revenue for all deals including refinanced deals Total unpaid principal from Merchant on the current deal Newly Refinanced Deal: New cash infusion minus administrative fees
- 7. Refinanced Deal Tracking Equations Copyright 2013. Five Components, Inc. All Rights Reserved 7 Amount Requested [minus] Administrative Fees Pulled from previous deal at the time of refinance The new cash infusion provided to the Merchant Total cash exposure including refinanced deals Total revenue for all deals including refinanced deals Actual Expected Payback [minus] Net Advance Amount [minus ]Commission Paid [minus] Amount Outstanding from Previous Deal Net Advance Amount [minus] Amount Repaid
- 8. MCA Suite Contact Information To learn more about MCA Suite and how we can improve your merchant cash advance operations, please contact us for a demo: www.mcasuite.com info@mcasuite.com twitter.com/MCASuite Copyright 2013. Five Components, Inc. All Rights Reserved 8