American Express Small Business Loans

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American Express Small Business Loans-American Express Merchant Financing products are commercial loans, not purchases or discounts of receivables or cash advances. You must repay the loan in full, together with the loan fee, regardless of your future revenue.American Express Merchant Financing offers unsecured business loans to customers in good standing. The major benefit of these loans is that instead of paying interest and a host of various fees, you pay a fixed financing fee.

Type Funding American Express Small Business Loans

American Express Small Business Loans

Settlement Advance

  • Loan Amount: Based, in part, on all your historical credit and debit card receivables each month; with a loan amount ranging from $10,000 to $1,000,000.
  • Term: One year agreement, automatically renewed unless either party provides 60 days notice to terminate. There are no early termination fees if you choose to cancel.
  • Repayment: Automatic, not manual.
  • Disbursements: Monthly, on the same date each month, which you select, into your business bank account. Monthly loan amount is reevaluated every six months.
  • Fee: 0.5- 0.67%
  • Additional Information: Ideal for helping to manage monthly cash flow. To apply for Settlement Advance, please call 1-855-298-1209 today.

Six Month Financing

  • Loan Amount: Based, in part, on your historical credit and debit card receivables for the past 12 months and performance to date; with a loan amount ranging from $36,000 to $2,000,000.
  • Term: Six months
  • Repayment: Automatic, not manual.
  • Disbursement: One time disbursement.
  • Fee: 3-7%
  • Additional Information: Ideal for upgrading to new equipment or funding large projects. No early termination fee.

One Year Financing

  • Loan Amount: Based, in part, on your historical credit and debit card receivables for the past 12 months and performance to date; with a loan amount ranging from $5,000 to $2,000,000.
  • For loans, $35,000 and below, a personal guaranty may be required.
  • Term: One year
  • Repayment: Automatic, not manual.
  • Disbursement: One time disbursement.
  • Fee: 6-14%
  • Additional Information: Ideal for upgrading to new equipment or funding large projects. No early termination fee.

Two Year Financing

  • Loan Amount: Based, in part, on your historical credit and debit card receivables for the past 12-24 months and performance to date; with a loan amount ranging from $36,000 to $2,000,000.
  • Term: Two-Years
  • Repayment: Automatic, not manual.
  • Disbursement: One time disbursement.
  • Fee: 12-28%
  • Additional Information: Ideal for upgrading to new equipment or funding large projects. No early termination fee.

To be eligible for American Express Merchant Financing, your business must currently accept American Express cards and have accepted credit and debit cards for two years with a minimum of $50,000 in credit and debit payments over the past year. Up to $750,000 is available as a small business loan, based on your projected American Express charge volume. You can choose to receive your funds all at once or in monthly disbursements. An advantage of this business loan is that American Express reviews applications quickly, and if you’re approved, you could receive your funds within three business days of enrolling. Another advantage is that you’re not required to put up collateral or a personal guarantee in order to secure the loan.

Qualifies for These American Express Small Business Loans

First off, in order to pursue this financing option, you have to be a merchant that accepts American Express credit cards for your business.

American Express small business loans are repaid when they take a portion of your Amex card transactions—so accepting American Express cards is the absolute baseline for eligibility.

After that, American Express looks at the following qualifications that most small business lenders consider:

  • Annual revenue. American Express wants to see that your business brings in a minimum of $50,000 in annual revenue.
  • Credit and debit card receivables. Because much of this financing is based off of what you bring in in credit card sales, American Express checks to see that you have a minimum of $12,000 in annual credit and debit receivables.
  • Time in business. Like most business lenders, American Express looks to see if you’ve been in business for at least 24 months.

American Express looks at those three factors, along with creditworthiness (though they don’t set a range for eligible credit scores), for any application for their financing products. However, if you’re applying for the two-year financing, they also look to see that you’ve accepted American Express credit cards for the past 24 months.

You should also be aware that American Express doesn’t lend to business in certain industries, like debt collection, insurance, adult entertainment, brokers, and so on. Check out their list of ineligible industries to make sure that your industry isn’t on there.

But in general, retail, restaurant, and lodging businesses (ones that do high volumes in credit card transactions) are good candidates for American Express small business loans.

What Are These American Express Small Business Loans Good For?

This loan is ideal for your small businesses if you will quickly be able to pay off the money you borrow. For example, if you need funds to purchase extra inventory to prepare for your busy season, and you know that you’ll be able to repay the loan in full within a year, this lender is a good option. In fact, one perk of this funding is that if you’re able to repay your loan early, you could receive up to a 50% rebate on your fixed financing fee. Although two-year loans are available, fees are substantially higher than those for one-year loans.

American Express makes it convenient to repay your loan by automatically retaining a percentage of your receivables. However, be aware that if you aren’t able to repay your loan in full by the end of the term, they will collect 100% of your receivables until you’ve fully repaid the outstanding balance.

American Express Merchant Financing focuses on short-term loans and pulls funds from your credit and debit receivables to satisfy your outstanding balance. This is a great option because of the fixed financing fee, but only if your business has a high American Express charge volume and if you’ll be able to pay off the loan on time and in full.

The Advantages American Express Small Business Loans

  • Simple application process. The application process for any product in the Merchant Financing program is fully online. Typically, you just need to submit a few different documents: tax returns, bank statements, and monthly statements from credit card processors.
  • Fast time to funding. If you’re looking for quick business loans, then an Amex small business loan could be a good fit. In the best case, you could be approved for business funding the next day. The speed of the funding depends on a few different factors, including your credit card processing agreements, the repayment method you choose, the loan amount, and the product term you’re applying for.
  • (Relatively) affordable. As far as fast, easy financing goes, American Express offers relatively affordable rates. Compared to similar products, like merchant cash advances, American Express small business loans have a very affordable effective APR range.
  • Automatic payments. Unlike other small business financing products, your business loan repayments are automatically deducted. No checks necessary (and no fear of missing payments)!
  • Prepayment discounts. Other small business lenders don’t let you repay your financing early (or charge you a penalty if you do). However, if you can manage to pay off your Amex loan early, you can stand to save a fair amount of money in the rebate.

The Disadvantages American Express Small Business Loans

  • Short terms. If you qualify for a larger loan amount with American Express, that’s a lot of cash to pay back over a short amount of time—even if you qualify for the longest term (two years). You won’t have the debt on your books for too long, but you’ll have high repayment amounts.
  • High(er) APRs. Again, when compared to similar financing products, American Express small business loans are relatively affordable. However, if you can qualify for other products—like medium-term loans, SBA loans, orbusiness lines of credit—you’ll certainly find lower rates for your business.
  • Tough on cash flow. If you choose to have Amex collect repayment by taking a fixed percentage of your daily credit and debit card sales, that can seriously cut into your week-to-week cash flow.
  • (Relatively) more stringent requirements. Whereas merchant cash advance companies and some short-term lenders work on very few qualification standards, American Express does look at your business financials pretty closely before they approve you. However, you’ll find that their requirements are much more manageable than that of a bank, SBA lender, or longer-term lender.
  • Consequences if you can’t repay. As with any small business lender, American Express has different consequences if you can’t pay—which they outline explicitly on their website. If you can’t pay in full one month, that affects the amount you’re disbursed the next (for the Settlement Advance). If you repay less than 70% of the funded amount, Amex could initiate an ACH debit from your business’s bank account on file for the amount unpaid. For the one- or two-year financing, failure to pay in full at the end of the term results in a repayment rate of 100% until the outstanding balance is repaid. Or they could simply initiate an ACH debit to collect on the amount unpaid.

All in, American Express small business loans could be a solid financing option for merchants who need fast financing. However, if you qualify for a less-expensive option, it’s always better to go that financing route.