I was watching Charlie Rose the other night and he was having a conversation about the mortgage and credit crisis in the U.S. They mentioned that prior to the recent “meltdown” (I’m trying to act like a “talking head” here), 40% of the GDP in the U.S was due to the housing sector. I was unaware that such a disproportionate amount was due to housing and when we include financial services on top of that it is easy to see why the crises in these 2 sectors plays havoc with the whole economy.

What does this have to do with Merchant funding Goes Back to School you ask?

Well, I wondered how much of the Canadian economy is supported by Going Back to School. Think of all the advertising and promotions that we are bombarded with starting shortly. Businesses such as children’s clothing stores, shoe stores, stationary and school supplies, office furniture, groceries, and book stores all get substantial lifts during this time of the year. There are many small and medium size independent Canadian merchants that fit into this group of businesses.

Merchant Cash Advances are a great source of financing Back to School promotions or the increase in sales due to this time of year for any business. These businesses can use the merchant funding by selling future credit and debit card sales that they will receive in September/October. This money can be used to pay for more inventory, sales, marketing and promotions, equipment or renovations in anticipation of the sales bump due to Back to School. Businesses that might not otherwise be able to get a traditional loan in time (or have the eligibility for) can qualify for merchant funding and put the cash to Back to School use immediately.