merchant cash advance deal tracking metrics
DESCRIPTION
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.TRANSCRIPT
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MCA Suite Deal Tracking Metrics
August 2013
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)
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New Deal Tracking Labels & Definitions For Single Deals
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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
Single Deal Tracking Equations
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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
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)
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Newly Refinanced Deal That Include Balance From Previous Deal
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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
Refinanced Deal Tracking Equations
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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
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
twitter.com/MCASuite
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