AMEX Merchant Financing Q&A

American Express? Merchant Financing Q&A

Q:

WHAT IS AMERICAN EXPRESS MERCHANT FINANCING?

A:

American Express Merchant Financing is a commercial loan product from American Express, developed to address the cash flow balancing

needs of small businesses, one of American Express' core merchant groups. The financing platform offers many attractive benefits relative to

competitive financing products in the marketplace today. American Express Merchant Financing provides an alternative for businesses in

good standing to access the capital needed to maintain and grow their operations.

Q:

HOW DOES AMERICAN EXPRESS MERCHANT FINANCING DIFFER FROM A TRADITIONAL COMMERCIAL LOAN?

A:

In contrast to traditional commercial lending vehicles, American Express Merchant Financing has no variable APR, can provide financing

from $10,000 up to $2,000,000 and includes an automatic repayment process based on either American Express settlements or all

credit/debit receivables (including American Express).

Q:

WHAT IS THE ACTUAL INTEREST RATE ON THE ANNUAL AMERICAN EXPRESS MERCHANT FINANCING PRODUCT?

A:

There are no interest rates associated with the American Express Merchant Financing products. Rather, for the Annual product, we charge an

8% fixed fee on the loan amount. Because it is a fixed-fee product, the merchant knows upfront exactly how much will be paid in finance

fees in connection with the loan.

Q:

HOW DO I KNOW IF MY BUSINESS QUALIFIES FOR AMERICAN EXPRESS MERCHANT FINANCING PRODUCTS?

A:

Minimum requirements for Merchant Financing are 2 years as Card Accepting Merchants and annual CV of $50,000 across all networks. For

more information about merchant specific eligibility, a member of the American Express Merchant Financing Product Team will follow up

with the merchant.

Q:

HOW DOES AMEX DETERMINE THE TOTAL FUNDING AMOUNT (I.E. BASED OFF OF AVERAGE MONTHLY PROCESSING VOLUME)?

A:

We will give up to 25% of total card processing volume (historical) for merchants with less than 2 years AXP tenure, or up to 100% of AXP

charge volume for merchants with more than 2 years AXP tenure. These are max amounts and can vary depending on a number of under

writing variables.

Q:

TO CONFIRM, THESE PAYMENTS ARE GOING TO BE SPLIT FROM THEIR DAILY BATCHES?

A:

We have 3 different repayment options. Split Funding is an automatic split on the processing side, but that will take a tech build so will not

be available, at least in the near term. Debit ACH or a lockbox may be used instead. For Debit ACH, we just take a set amount directly from

the merchants back account. For lockbox, we set up a Wells Fargo account in the merchants name and direct settlements to there, take our

%, then transfer on to the merchants bank account. Depending on different factors, and merchant preference, either of the last two options

may be used.

Q:

WHERE DO WE REFER GENERAL QUESTIONS REGARDING THE PROGRAM? RM/PRODUCT SALES/CLIENT SERVICES ETC?

A:

Questions about the program should go to the main contact person at PPS. If necessary for answers beyond that, I can be contacted.

Q:

IS THERE A CHARGE BACK TIME FRAME ON COMMISSIONS, SO IF A MERCHANT CLOSES OR DEFAULTS, CAN THEY AND WHEN WOULD THE

TAKE BACK ANY COMMISSIONS?

A:

No. Commissions are paid when a loan books. AXP holds the risk on default.

Q:

HOW LONG IS UNDERWRITING PROCESS TO DETERMINE AN APPROVAL?

A:

This varies. Some merchants can be instantly approved and no underwriting is necessary. For others it can vary from 2 days to 5 days.

Q:

WHAT IS PLAN FOR REFERRING NON-APPROVALS BACK TO OUR IN-HOUSE FUNDING DESK?

A:

You will be notified if a loan is not approved on the weekly or daily report.

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Q:

IT WAS STATED ONLY MERCHANTS ACCEPTING AMEX CAN APPLY, SO ARE WE ONLY TARGETING CURRENT ACCEPTORS AND ITS UP TO THE

AGENTS TO GO AFTER THE NON ACCEPTORS?

A:

A merchant must be an accepting AXP merchant to apply. They can apply to accept AXP if they are interested in the loan and then apply for

the loan once they are active.

Q:

ARE THERE COMMISSIONS ON A RENEWAL LOAN?

A:

Yes, commissions are paid on renewal loans.

Q:

CAN A MERCHANT BE MOVED OFF OR ONTO OUR PLATFORM IF THEY ALREADY HAVE A LOAN WITH AMEX SOMEWHERE ELSE? FOR

EXAMPLE, THEY ARE WITH HARBOR TOUCH AND AMEX LOAN, OUR AGENTS SELLS THEM, WE CAN MOVE THE MERCHANT ACCOUNT AND

AMEX PAYMENTS TO US AND VISE VERSA? OR THEY ARE "STUCK" FOR LIFE OF LOAN WITH CURRENT PROCESSOR?

A:

As per the merchants Merchant Financing agreement, they cannot switch processors while they have an outstanding loan.

Q:

DOES AMEX PRESENT BACK BOTH THE ANNUAL AND MONTHLY LOAN PROGRAMS TO THE MERCHANT OR THEY HAVE TO DECIDE WHAT

THEY WANT TO APPLY FOR AHEAD OF TIME?

A:

Our sales team will present both.

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