It's that time of year again in Toronto! The glorious costumes, music, food and people of the Caribbean are celebrated this weekend with the arrival of the annual Caribana parade. While various events have been taking place throughout the city for weeks – including tonight's King & Queen Competition at Lamport Stadium where massive, elaborate costumes will be on display for an audience of thousands to crown this year's king and queen of Caribana – this Saturday's parade marks the biggest celebration during the annual Caribbean festival.

The parade will also mark one of the biggest boosts in the local economy this year. Each year, visitors from all over the world visit Toronto for the Caribana parade to take in the exciting sights and sounds. Revellers and masqueraders in costumes of all types, representing the tradition of the Caribbean islands take over Lakeshore Boulevard in a vibrantly colourful parade with booming Calypso music as its soundtrack and non-stop dancing as its main activity.

Despite the nation's struggling economy and the ongoing garbage strike in Toronto, event organizers are confident that Caribana will continue to provide a boost to the local tourism trade.

Toronto Sun's Brett Clarkson spoke to Sam Lews, general manager of operations for Caribana, earlier this week. Lewis remarked that during tough economic times, most travellers will tend to drive instead of fly which suits common visitors from places such as New York, Detroit, Washington and Atlanta just fine.

In his article, “Caribana A Big Boost For Toronto”, Clarkson also notes that “about 1.3 million people attended the festival in one form or another last year” and that “the annual Caribbean festival, now in its 42nd year, pumps an estimated $300 million annually into the local economy.”

“It's common knowledge in the Toronto tourism industry that Caribana is one of the busiest weekends of the year for local hotels, if not the busiest,” writes Clarkson.

While a number of hotels in the downtown area have seen business slow down this year, with the garbage strike and the recession serving as primary factors, Lewis maintains that anyone looking for a hotel room in the city this weekend will have “their work cut out for them.”

Apparently, as over a million people flock to the Caribana parade to “jump up” this weekend, Toronto's economy will be doing the same.

Apparently, making premature declarations about the resolving of major matters seems to be the popular thing to do as of late. Late last week, The Bank of Canada went on record by saying the recession was over, only for that declaration to be challenged days later.

Earlier this week, it had been reported that a deal had been reached between striking city workers represented by CUPE Local 79 and CUPE Local 416 and the City of Toronto. Today, however, that story too appears to have been hastily reported.

According to Toronto Sun's Jonathan Jenkins, Toronto Mayor David Miller was quoted at a press conference today as saying: “It's very frustrating…Neither union has agreed to back to work protocol. I'm hoping that may change over the next few hours.”

Unfortunately, Toronto residents will not see the resumption of garbage pickup, daycare or summer camps as early as they expected. In what has been an already frustrating summer, news of the agreement to end the strike not yet being reached is truly aggravating for Torontonians.

According to a report released by The Canadian Press on 680News.com, votes on an agreement to end the strike were cast by members of Local 79 – representing inside workers – however, members of Local 416 – representing outside workers – were instructed to no-show the process.

At today's press conference, held at 2 p.m., Mayor Miller remained adamant that the city was doing all it could to resolve the issue. He was also quoted as saying: “I want to be clear about this. It is the unions who are on strike who have kept their employees out…It is not the city who has been preventing them from coming back to work nor has the city ever said that we don't want people back to work.”

Miller noted that the city council's vote would likely take place on Friday although it remains unknown when outside workers will vote. Mark Ferguson, president of Local 416 representing 6,000 outside workers stated that there are “still final pieces to put into place.” Workers and Toronto citizens alike are hopeful that an agreement to get city workers back on the job will be met sooner than later.

According to The Canadian Press report: “The tentative deal gives the workers wage increases totalling just under six per cent over three years and a compromise was worked out on sick days – one of the key sticking points nearing the end of negotiations.” The compromise eliminates the employees ability to “bank” any of their permitted 18 sick days if not used during the year.

At this time, however, citizens of the City of Toronto will be forced to continue to wait for the resolution of this matter, in hopes that things will literally be cleaned up soon.

Last week, The Bank of Canada caused quite a stir with the declaration that the recession was, in fact, over. Numerous visitors to websites belonging to Toronto newspapers who published the news exclaimed both their disbelief and frustration with the unfathomable story.

Today, it seems, some of these publications are recanting this story. In today's Toronto Sun, The Canadian Press instead claims that “Canada’s economy may be showing signs of life, but federal Finance Minister Jim Flaherty isn’t yet ready to declare the recession over.”

According to the article, Flaherty admits that it was “premature” to declare the end of the recession but believes that “there are good signs that the economy has stabilized”.

“There are the beginnings of a recovery,” says Flaherty, “and I wouldn’t put it any stronger than that.”

This, of course, would echo the sentiments of numerous agitated Canadians who voiced (or typed) their opinions about the supposed end to the recession last week. The Bank of Canada's declaration angered many who had lost their jobs due to the struggling economy.

Wrote one angry reader on Toronto Sun's website: “Here's the thing, when job losses come back to reality numbers, lay offs stop (and) government gets out of debt, then come back to us and tell us the recession is over.”

Clearly, employment loss is atop the list of negative effects of the recession on Canadian society. Evidence of this is found in the number of Employment Insurance benefits currently being doled out to jobless citizens across the country.

According to The Canadian Press, “Statistics Canada reported Tuesday that EI payouts hit their highest level in May since 1997. Just over three quarters of a million Canadians, 778,700 people, received EI benefits in May, an increase of 65,600 or 9.2% from the month earlier.”

Liberal House Leader Ralph Goodale was quoted as sharing these words about this worrisome situation: “The sad reality is these numbers only scratch the surface of the hardships many Canadian families are facing. For everyone getting EI benefits, there’s someone else who’s lost their job but can’t access Employment Insurance.”

Evidently, the jury is out on when the recession will truly be over. However, as reports suggest, Canada seems to be on its way to a brighter economic future. Let's hope it's sooner than later.

Ask Torontonians how their summers are going so far and many of them will respond, “it stinks!” Literally, in some parts of the city. While the moderate warmth and sunshine are contributing factors to the less than stellar season, the strike that has kept garbage from being picked up all around Canada's largest city would be the main reason for the displeasure of its residents.

Large bags of garbage have been accumulating in massive heaps in temporary drop off zones throughout Toronto since the strike began on June 22nd. Residents of nearby areas of these sites have been complaining, not only about the smell of the unsanitary trash, but of the dangerous pesticides being used to ward off insects.

The strike has also caused major headaches for Torontonians as it has forced the closing of daycares, parks, pools and recreation services citywide. Needless to say, this has not been a glorious summer so far.

However, at 3:30pm today, “CUPE Local 79 President Ann Dembinksi announced the city's inside workers had reached a deal” as reported by Don Peat on Toronto Sun's website. Her counterpart CUPE Local 416 President Mark Ferguson, who represents outside workers, revealed that the city had dropped all concessions that were on the bargaining table.

He warned, however, that picketers may still be present around the city until the deal is officially approved. Daniel Dale of The Toronto Star notes that once the settlement has been made, city services should resume fairly quickly.

This, of course, would certainly inject a little sunshine back into Toronto's drab summer. On The Toronto Star's website earlier today, Dale used 2002's civic strike as a reference to quell the worries of Toronto residents everywhere. He notes that within days of that strike ending, indoor pools, daycares, day camps and a number of other city services were restored.

As it relates to garbage pickup, Dale writes that the 2002 strike ended on a Thursday, “litter bins and parks were cleaned on the weekend; temporary dumpsites were vacated by Sunday night (and) garbage collection resumed the following week.”

Here's hoping that the 2009 strike is over, and Toronto's beautiful summer is truly about to begin.

Yesterday, The Bank of Canada made headlines by declaring that the recession was indeed “over”. The Synergy Merchant Services Blog joined Toronto newspapers and television broadcasters in reporting on this astonishing piece of news.

As written by Julian Beltrame of The Canadian Press in yesterday's Toronto Sun: “The bank said Thursday it estimates the Canadian economy will advance by 1.3% during the current July-September period, and 3% in the fourth quarter, both at annualized rates”.

Numerous online readers of this report, however, were not quick to start celebrating. Many Canadians, of course, have felt victimized by the nation's economic decline through the loss of their jobs. The hurt, anger and frustration felt by these individuals were made clear by many.

A reader under the name “Big Al” posted this question in response to Beltrame's article entitled “Bank of Canada Declares Recession Over” on Toronto Sun's website yesterday: “If the recession is over how come I haven't been able to find a full time job yet.”

These sentiments were shared by Wayne Moores who also expressed his feelings on the site: “…the middle class has seen a 50 buck a year raise in two decades, family debt is at an all time high, personal bankruptcy also at an all time high. But every thing is great. Funny, the blast furnaces are still cold in Hamilton, the truck plant is not reopening in Osawa [sic]. I don't hear that the Feds are returning to surpluses any time soon. What a load of crap.”

One reader, known simply as “Paul” responded this way: “Recession over ????? Of which planet do they speak of [sic] ???”

Evidently, a lot of damage has been done to Canadian society as a result of the recession. For many, the end of the recession will be marked by the reclaiming of jobs by the numerous citizens of Canada who have lost employment over the past year. Clearly, the nation and the rest of the world's economic troubles remain a complicated issue.

According to Federal Finance Minister Jim Flaherty, Canada's future is bright. After taking part in the groundbreaking for a new park in Toronto's waterfront yesterday, The Canadian Press quoted Flaherty as saying that “Canada went into the recession much later than the United States (and) will come out more strongly than the United States…Because our fiscal fundamentals are stronger, we weren’t running big deficits in Canada.”

It is likely, however, that for most Canadians, celebrating the end of the recession won't happen just yet.

There has been a lot of talk about the global recession recently…and not just on the Synergy Merchant Services Blog. But just as soon as the recession has begun, it seems that it has ended! It has, at least, according to business reporter Rita Trichur.

In today's edition of The Toronto Star, Trichur writes that The Bank of Canada reports “the end of the recession is nigh”.

Based on information received from the bank's latest monetary policy report, she notes that “Canada's economy could mark the end of the recession this quarter amid improved financial conditions, firmer commodity prices and recovering consumer confidence”.

According to the report, the central bank predicts that the economy will grow by 1.3 per cent on an annualized basis in the third quarter, marking an increase from its previous projection of a 1 per cent contraction. Previously, The Bank of Canada believed the recovery would not take place until the fourth quarter.

Furthermore, it is projected that the Canadian economy will continue to see growth in 2010 and 2011. This new optimistic view was encouraged, in part, by a spike in consumer spending as well as a slowing down of the pace of contraction in the second quarter, notes Trichur.

While Trichur's report is cause for hope, it is unfortunately also subject to speculation. Over the past several months, reporters have predicted both the worsening and the end of the recession in a back and forth fashion almost daily. Apparently, this is becoming all too frustrating for a good portion of the Canadian public.

One of the main and most obvious reasons for the discontent of so many Canadians is the job losses that many have had to incur as a result of the nation's economic crisis. Here's how one angry reader responded to Trichur's “Bank Declares Recession Over” article on The Toronto Star's website today: “So all the recently unemployed will now get their jobs back, right? Yeah, sure! And I just saw a pig flying outside my window”.

“Tell this to the people who can barley [sic] survive now and are still in fear of losing their jobs and all the problems that follow this event,” says another.

Evidently, the recession is not yet over. At least, not in the minds of the many Canadians who have endured hardships as a result of the nation's economic decline. As always, the Synergy Merchant Services Blog will stay on top of this ever-changing story.

Yesterday, the Synergy Merchant Services Blog explored a number of ideas that consumers may utilize to battle the current recession. But what about the numerous businesses throughout Canada who have also had to endure setbacks due to the struggling economy?

Some business owners have been left with no choice but to let go of some of their staff members in order to save money. In some worst case scenarios, others have resorted to considering the closing of their businesses altogether. But as communicated in yesterday's blog, all hope is not lost. There are a number of ways that Canadian businesses can cope with the tough financial crisis affecting the world today.

For restaurtant owners, StarChefs.com's Katherine Martinelli recommends a number of simple yet effective methods of keeping business healthy. Among them is the idea of encouraging loyalty among your customers.

“Make your regulars feel special,” writes Martinelli, “Squeeze in a repeat customer even if you’re booked. A comped drink or appetizer…Whatever you do, don’t take those regulars for granted—they’re the foundation of your customer base”.

Interestingly, Martinelli also suggests training and keeping your current staff. The simple task of making your staff feel appreciated will ensure that they show up to work happy and ready to do the best job that they can. This, in turn, will lead to increased customer satisfaction and repeat business.

All types of businesses can make use of the many suggestions offered up by Women's Business Web as well. And the best part is, you don't even have to be a woman to make these tips work for you! According to New Zealand's WBW website, finding FREE ways of marketing your business is one of the most sensible methods of staying afloat during a recession. One way of doing this would be to invite customers for a tour of your premises that would include demonstrations of your various products and services.

So, in fact, while many business owners may be reluctantly considering downsizing to save on the cost of running their companies, doing the opposite may have greater benefits. In Mark Wadell's February 2008 article “Recession-Proof Your Canadian Business” from CanadaOne.com, he suggests that expansion may actually be good idea during a financial crisis. “Even a small business,” insists Wadell, “can expand their sales reach to include foreign markets”.

Of course, expansion is one of the most popular reasons why many Canadian business owners seek a merchant cash advance. Who knew that now may be the best time to look into one?

The battle continues.

This just in: Canada is in a recession.

In fact, nearly two months ago, The Toronto Star Business Reporter, Rita Trichur wrote that “Statistics Canada confirmed (that) the economy contracted at an annualized rate of 5.4 per cent in the first quarter. That follows a 3.7 per cent drop in the fourth quarter of 2008 – meeting the definition of a recession with two successive quarters of declining real gross domestic product”.

So, the worst kept secret in today's financial news is finally out. But is it really the end of the world?

While experiencing a recession as we are now, many individuals tend to adopt a type of “cease and desist” attitude. That is, to stop spending as much as possible! But going through a challenging financial crisis doesn't necessarily mean that you can't spend any money at all.

Battling through a recession, of course, does take time, effort and patience and can put an emotional strain on people with all types of incomes. There are ways, however, to spend money wisely so that living through tough economic times doesn't have to be so uncomfortable. As well, certain types of spending can help turn the recession around.

We all have to eat, right? So what ways can we assure that our bellies are full while encouraging economic growth in your local communities? One way to battle the recession, according to Gomestic.com, is to purchase food from local markets and independent restaurants. Doing so, says the site, will “put the money directly into the hands of another local individual. Hopefully they will spend it locally as well, and in turn it will keep the local economy strong”.

This month, writers from the magazine, Time Out Kuala Lumpur came up with some very interesting ideas for beating the recession in an article entitled “102 Ways To Beat The Recession”.

Need a workout? Take advantage of fitness clubs and their free trial offers, says “the TOKL team”: “Most gyms let you try their facilities for a free trial period…reap as much advice from the trainers as you can during your tryout. Finally, pack it all up and hit the outdoor exercise stations with your newfound knowledge”.

The magazine also offers whimsical suggestions on how to save money. They include spraying yourself with sample perfume at fragrance counters before going out to dinner or reading a book in the comfy couches at Borders instead of buying one to take home!

The Synergy Merchant Services Blog will continue to explore ways to battle the recession in the coming weeks. Stay tuned!

As we all know, Canada is gearing up to welcome back the Winter Olympic Games this coming February. Vancouver and Whistler, B.C. are set to co-host the international sporting event which – as mentioned in the Synergy Merchant Services Blog last week – should hopefully help to somewhat strengthen the Canadian economy.

While arguments can be made that the 2010 Winter Olympics will do wonders for Canada's struggling financial state in the new year, it should not go unnoticed that many athletes who are currently preparing to compete are already feeling the negative effects of the recession.

Most Olympic athletes are not professionals who are paid to play their respective sports. Many of them depend on sponsorship, in addition to their own savings, to help support their training efforts and Olympic dreams. This past February, NBC Sports reported that American bobsledder Brock Kreitzburg lost out on his Home Depot sponsorship forcing him to “find other ways to pay the rent”.

Unfortunately, Canadian Olympians know this all too well. The financial struggles faced by many of Canada's athletes helped to inspire the creation of OlyBLOG.com, which is owned by the Vancouver-based Area46 Media Communications marketing group. On this site dedicated to helping our Olympic athletes, it is noted that most Olympic sponsors “focus primarily on elite athletes who compete in high visibility popular sports, and the rest are left struggling in the background”.

Therefore, one suggestion offered by the website is for small and medium sized businesses in Canada to enter into “cross promotion” agreements with local athletes. The bobsledders, speedskaters and skiiers who represent our nation could certainly make use of the sponsorship offered to them as training would become more affordable.

And, in turn, the athletes could help raise the visibility of the company by advertising and placing links on their websites, making on-air plugs and/or wearing clothing carrying the company logos. These are just a few examples of how cross-promotion may help both parties achieve greater success, in addition to helping Canada secure more medals!

Sadly, as OlyBLOG.com notes, “many athletes drop out (of competition) due to financial stress”. So although the 2010 Winter Olympics Games do not kick off until February, perhaps the opportunity for the Games to strengthen the Canadian economy is already here.

One of the most common phrases we hear from our clients at Synergy Merchant Services is “my bank turned me down”. Ironically, many business owners throughout Canada who have long developed relationships with financial institutions find that they are not being approved for small business loans.

Many owners go so far as exclaiming that they feel “betrayed” as they thought that having banked with these financial institutions for so long would have been a reason that they could be trusted. In many cases, these same banks had been advertising their small business loan programs to these owners only to have the eventual application go unapproved.

“Anyone who has looked into getting a bank loan these days knows they are hard to come by,” says Kayce T. Ataiyero, in the July 10, 2009 issue of The Chicago Tribune, “The poor economy and the resulting rise in loan defaults have scared banks into setting the credit bar so high that even those with decent FICO scores are having trouble getting approval,”

Whatever the reason, it is becoming more and more apparent that if a small to medium-sized business owner has intentions of expanding his or her business, the traditional bank loan may no longer be looked upon as the first source of assistance.

Owner of the first Chili'sGrill & Bar in Ontario, Heath Everett knows this all too well. In Andrea Hopkins' June 29, 2009 article on Portfolio.com, she recounts Everett's experience with trying to secure a business loan from one of Canada's banks.

“I approached all of the major Canadian financial institutions, the big banks, and with the exception of RBC none would even entertain a sit-down conversation with me,” Everett said. “(They said) restaurants are too risky.”

If there is one thing that Synergy Merchants Services can guarantee, it is that a free quote is the least we can provide to Canadian business owners who have been processing credit and debit transactions in their establishments. It is important that business owners looking to grow their businesses are, at the very least, afforded the opportunity to know how much they may be approved for.

While there is, of course, a few points of criteria that must be met to determine eligibility for the program, Synergy maintains that the process of attaining extra capital through a merchant cash advance is proving to be a lot less painstaking than going to a bank for a loan. Evidently, such loans are getting harder to come by.

For the first time since 1988, Canada will be hosting the Winter Olympic Games once again in 2010. Taking place in Vancouver, British Columbia (and sharing some of the festivities with nearby Whistler), the Winter Olympics always mark an exciting time in Canada's sporting world. Expected to be a showcase of Canadian athletic prowess (especially in ice hockey where Team Canada looks to regain its gold medal status last achieved in 2002 at Salt Lake City), the upcoming Winter Olympic Games in Vancouver is highly anticipated as an event where Canadian athletes will shine.

Returning to Canada since the '88 games were held in Calgary, Alberta, the Olympics also brings to the Great White North the hope for even greater prosperity in the financial world. With Canada not being immune to the struggling global economy, there is hope that the visitation of sports fans from all over the world to the Vancouver and Whistler areas will provide a surge in Canada's economic growth.

According to The Canadian Press, Paul Darby, the Conference Board of Canada's deputy chief economist, agrees that Canada, especially British Columbia, will experience “an Olympic effect”. As mentioned in an article published on July 8, 2009, Darby estimates that the Games “will drive growth in B.C. by about 3.3 per cent in 2010, more than any other province”.

He warns, however, that the positive effect of the Olympic Games in Vancouver and Whistler may only last for two to three years. Darby notes that “while the 2010 Games will provide an international showcase for Canada, and in particular the Vancouver area around the event, 'don't count on that advertising to last for 10 years'”. Others remain a bit more optimistic.

With the Winter Olympics providing a showcase for the incredible mountains and hills used for skiing in Vancouver and Whistler, there is hope that tourists worldwide will view the area as a top choice destination for participating in this exhilrating sport.

Ski resort owners in the area are especially hopeful since The Canadian Ski Council released statistics this month that show that “the number of skiers and snowboarders to hit Canadian slopes fell 10 per cent year-over-year to 18.4 million visitors, down from a record 20.5 million visitors in the 2007/08 season” citing “poor snow conditions, the recession and an aging population (as) some of the factors behind the recent drop”.

At the recent annual Canadian Ski Council conference in Whistler, Bill Jensen, the chief executive of Intrawest, owner of the 2010 Olympics venue Whistler Blackcomb, said that “the jury is out on whether we will experience…a longer-term sustained bump” in the ski industry's success due to the 2010 Winter Games.

Only time will tell, of course. But as Canadians from all over the country cheer on their athletic countrymen to boost their spirits this coming February, we should all hope a similar “boost” in our economy follows suit.

Stay tuned for more on this topic in the coming months leading up the Winter Olympic Games here on the Synergy Merchant Services Blog.

As discussed previously on the Synergy Merchant Services Blog, most businesses could be considered “seasonal”. The many business owners that we have developed relationships with over the past several years have all communicated that their businesses do experience high and low seasons. Some moreso than others.

Motels and inns in cottage country, for example, enjoy a spike in business during the warmer months of the summer season. Understandably, many owners of these types of establishments choose to make upgrades, repairs and other types of renovations during the slower winter months.

These types of businesses are among those that experience the greatest satisfaction from participating in our merchant cash advance programs. One reason for this is the ability the cash advance offers them to use their future sales to finance their renovations immediately.

Owners of motels and inns are always concerned with ensuring that their rooms are clean, well-kept and most certainly functional. Plumbing and electricity may sometimes be issues that require immediate attention. The importance of maintaining their properties can be a constant stress.

Without worry for late fees, interest charges or letting go a large sum of their own capital, the merchant cash advance allows for major construction to be affordable right away. Not only will the changes and improvements to their facilities be ready in time for their peak season, but the increased business they receive as a result helps for the cash advance to be paid back with ease.

The increased sales volume these business owners enjoy once the summer season rolls around allows for a more expeditious repayment without affecting their cash flows. The best part, of course, is not having to have worried about making payments of any specific amount during the months in which business was slower.

If your business goes through its own highs and lows – and most certainly do – you owe it to yourself to look into how much a merchant cash advance may help you to make the most of your peak seasons.

This week, we have been taking a look at some of the most common myths and misconceptions about merchant cash advances. While this alternative source of business financing is growing in popularity, there is still some confusion over exactly how cash advances work and why the process of attaining them is more easy and convenient than the traditional bank loan.

Myth #3: Cash advance programs take advantage of companies that are going out of business.

Nothing could be further from the truth. One of the primary goals of Synergy Merchant Services' cash advance program is to assist business owners who have the mindset of expanding and growing their businesses.

Since the amount of the cash advance is determined by the amount of monthly credit and debit transactions processed by the business, Synergy ensures that each tailor-made quote allows for manageable payments to be made with the closing of each batch out. The payments are based on a specific percentage of the business' future credit and debit sales.

Keeping that in mind, it would be counterproductive to simply provide money to companies who are potentially closing down as they are less likely to produce any future sales. It benefits neither the business owner nor the merchant cash advance provider to partake in such an agreement as the advance would not likely be used to help the company grow. Therefore, it would be less probable that the company would pay the cash advance back.

Myth #4: Taking a cash advance will negatively affect a credit score.

Completely untrue. Because a cash advance entails the purchase of future credit and debit transactions, the money is NOT being borrowed. Therefore, attaining a merchant cash advance does not affect one's credit.

In addition, because there is no set schedule for the repayment of a cash advance, there is no such thing as a late payment. Again, a fixed small percentage of future credit and debit transactions is what makes up each payment that goes toward repaying the cash advance. A payment is made with each batch out. Synergy only gets paid after the merchant does. So, of course, there are no timely requirements set in place.

Therefore, no interest accrues. No late fees are applied. And best of all, no one is contacting the business owner to request a payment. The automated process is quick, easy and effortless. One's credit rating does not even come into play.

With the status of today's tumultuous financial climate, it has become commonplace to find that business owners across Canada are hesitant to become involved in any type of “increased debt”. This interestingly has been communicated to Synergy Merchant Services on a number of occasions as an integral reason why some merchants are skeptical about merchant cash advance programs.

Ironically, the objective of a merchant cash advance is to not only to avoid debt but to increase a company's profits. It is important, therefore, to dispel the myths about merchant cash advances. While there are numerous misconceptions about such a program, today we will focus on a couple of the more prevalent ones.

Myth #1: The program must be a scam, no money can be interest free.

As our merchant funding specialists always discuss in detail with all of our clients, there is, of course, a cost to attaining a merchant cash advance. The benefit, however, to knowing this set fee upfront is the peace of mind in knowing that your balance will NEVER get higher due to an accruing interest rate. Unlike loans provided by traditional banks, your cash advance does not accumulate interest regardless of how long your payback period is.

Myth #2: The cost of the cash advance is unaffordable.

Synergy Merchant Services tailor makes each cash advance to each specific business to ensure that payments are always manageable. Firstly, we make a purchase of a merchant's future credit and debit transaction receivables at a discount. This is how a merchant attains the cash advance upfront. The payback includes the cost of the advance which is paid back at a rate determined by his or her ongoing credit and debit card receivables.

In the past, we have actually been asked if the upfront cost of the advance is due right away! And, of course, the answer is “absolutely not”. The main objective of a cash advance is to ensure that the client has the extra capital required to help his or her business succeed. Merchants have used such advances for renovations and upgrading, advertising or even paying off bills.

Naturally then, there would be no reason to automatically provide a business owner with another bill upon receiving the cash advance. The nature of our program is such that it allows for flexibility with payments. No payment is ever greater than what a business owner can afford as it made up of a specific percentage of the credit and debit transactions the business makes on a monthly basis.

No accruing interest rate. No set payback schedule. No worries.

The Synergy Merchant Services Blog will continue to explore more of the various myths and misconceptions about merchant cash advances in the coming weeks.

Merchant cash advances are proving to be valuable sources of alternative financing for all types of businesses throughout Canada. Of course, with so many different business types, the uses of each cash advance varies.

While some companies look to open new locations, others choose to renovate. Many businesses look towards advertising to increase profits while others require the extra capital to purchase new equipment.

Synergy Merchant Services has found that numerous clients are enjoying the benefits of our cash advance program because previous to participating in it, they were unable to afford the equipment necessary to sustain their businesses. Restaurants are especially known for needing to either repair or replace their ovens and refrigerators, for example.

Many restaurant owners across Canada have become used to leasing their equipment as paying for such large items outright is generally unmanageable. According to eLease.com, “currently 35% of all equipment is leased”.

There are, of course, advantages to leasing over buying as the process allows for smaller payments to be made over time. Business owners, therefore, can make use of their new equipment without having to part with a large sum of money right away.

Business owners who have made use of our cash advance program, on the other hand, are finding it an even more convenient method of affording new equipment. The advantages to using a merchant cash advance to buy these large, yet necessary items over leasing them are many.

When leasing equipment, standard monthly payments are expected regardless of how well the business is performing. In addition, leases are often inelgible for renewal in the middle of the term regardless of the needs of the business during that time.

With a cash advance, the payment amounts that go toward the repayment of the advance, are dependent on the credit and debit cards sales made by the business each month. This ensures that no payment is unaffordable. As well, renewals are offered halfway through the payback term. This is a benefit many of our clients have taken advantage of.

In addition, a business owner who is using his or her cash advance for the purchase of new equipment can make the purchase outright without having to worry about additional interest charges.

So while leasing may have once been a viable option for business owners, buying new equipment with the help of a cash advance is an even better way to go.