Mike Ballases and Adam Beebe founded Houston-based Accord Business Funding in 2013. The pair has more than 40 years of funding experience in Texas, so their business’ Lone Star State roots run deep. Accord Business Funding offers only merchant cash advances through independent sales organizations — its staff doesn’t include an inside sales team. The company website claims its owners are hands on, adding flexibility to the approval process and helping a variety of businesses receive the working capital they need to operate and expand.
Accord Business Funding’s merchant cash advances aren’t small business loans; instead, they are future receivables you purchase. MCAs are typically more expensive than traditional loans because they carry more risk for the provider. Many of the businesses that take MCAs instead of loans do so out of necessity. Accord funds B papers, which represent businesses with low credit scores and other financial concerns — such as tax liens, judgement liens on payment plans, or dismissed or discharged bankruptcies — that make it difficult for them to get funding from traditional banks.
Although Accord Business Funding’s merchant cash advances offer some businesses opportunities, they aren’t huge. The advances are relatively small — from $5,000 to $150,000 — and carry short terms compared with others in the alternative lending industry. That might make them unattractive to some businesses. Accord will fund first-, second- and third-position deals, opening the door for businesses that have existing merchant cash advances and need a second or even third one but still need enough cash flow to cover all the payments, which can be taken as often as daily.
Accord Business Funding works exclusively with independent sales organizations, or ISOs. And although the company offers a contact form on its website, businesses might be routed through an ISO to secure funding, which could increase the advance’s cost. For the ISOs that choose to work with Accord, however, there are some rewards. It pays 100 percent commission on renewals and has a monthly volume bonus program, early buyout discount, syndication opportunities, white-label programs and credit card splits.
Accord Business Funding works with a many types of businesses. Those include ones that traditionally struggle to secure funding, such as auto dealers, trucking companies and construction businesses.
Hands-on owners lead to fast approval decisions — in as little as a couple of hours — and underwriting flexibility, allowing deals to be crafted to specific situations. The website offers a short contact form — which requests contact info and a message — where businesses and ISOs can describe their funding needs. It doesn’t offer a full application, like many in the industry do on their websites.
|Works with businesses that have less-than- perfect credit||Offers only merchant cash advances, which are often more expensive than traditional bank loans|
|Hands-on owners add flexibility to underwriting.||Provides relatively small amounts, up to $150,000|
|Approval decisions happen in a few hours.||Works only with ISOs, which can increase costs|
Accord Business Funding is best for a small business with fair credit and few other financial issues. The business should need a relatively small amount of money and have enough cash flow to pay back the advance within eight months. Your business can be based anywhere in the U.S., but those with Texas addresses might be in a better position. Accord Business Funding’s FundTex initiative is specifically designed for Texas-based businesses.
Always approach merchant cash advances with caution. They aren’t loans, but an advance on future receivables, such as credit and debit card sales. These don’t require a personal guarantee from the business owner, although some MCA providers might require a performance guarantee in which the owner promises not to damage the business by selling it or declaring bankruptcy.
Borrowers typically take merchant cash advance payments on a daily or weekly basis in the form of ACH or credit card splits. They are calculated as a percentage of the receivables, so the amount varies with sales volume, which can make calculating an APR and exact term impossible. Borrowers should note the total amount they must repay, including any additional fees listed in the deal, especially those not mentioned up-front. That will give you the actual cost of the money being advanced.
Because it offers merchant cash advances only, Accord Business Funding’s selection is narrow compared with others in the industry. It prefers to fund Texas-based companies, and its funding amounts — $5,000 to $150,000 — are relatively small. That said, the company’s willingness to work with businesses whose financial and credit histories are slightly blemished might make it a good option for some.