Merchant Cash Advance

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(Advantages Over Bank Loans)
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{{Infobox
 
{{Infobox
|title = Merchant Cash Advance
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|title = Tzadik HaLavan Shul
|image        = [[File:Space holder.jpg|215px|alt=Merchant Cash Advance]]
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|image        = [[File:Space holder.jpg|215px|alt=Yossi Banaah Synagogue]]
|header5 = Spelling:
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|header1 = Hebrew:
|data6  = Merchent, Advances
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|data2  = בית כנסת הצדיק הלבן רבי יוסי בנוי צפת
|header7 = Other Names:
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|header3 = Pronunciation:
|data8  = MCA, Merchant Loans, Credit Card Cash Advance Loans, Credit and Receivables Financing.}}
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|data4  = tz-a-deek ha-la-van, yos-si ba-an-ay
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|header5 = Other Names:
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|data6  = tz-a-deek ha-la-van, yos-si ba-an-ay
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|header7 = Spelling:
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|data8  = Banai, Banni, Bana, Banaa, Bannay, Bannah
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|header9 = Description:
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|data10  = Old Synagogue in Safed, Israel where the Tana Rabbi Yosi Bannah is buried.}}  
  
Merchant cash advances are an alternative to traditional bank loans used by many small businesses. Under this arrangement funders provide the business owners a lump sum in exchange for a percent of the companies future credit and debit card sales. Although merchant cash advances are more expensive then bank loans, they are often used by retail businesses that can not meet the exceedingly strict requirements of regular lenders.
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The Tzadik HaLavan synagogue, also known as the Yossi Banai Synagogue, is unique in that it was built around a gravesite. The synagogue is one of the oldest in [[safed|Tzfat]] and has seen continuous use for the last 500 years. Tzfat legend attributes miracles to the synagogue in the name of the rabbi for whom the synagogue was named.
  
An average merchant cash advance is approved within 4 days and only requires the last four months worth of the businesses credit card statements. Credit score and line of credit are not factors when it comes to a merchant cash advance approval. A lump sum for the agreed advance is generally transferred to the merchants account within two weeks of the applicants approval. Payback of the lent sum is normally done by an automatic deduction of a set percent from all future credit card transactions processed by the business until the cash advance has been paid off.  
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== Yossi Banai ==
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Rabbi Yossi Banai was a Talmudic-era scholar. He studied with Rabbi Akiva in the years following the destruction of the Temple and the exile of the Jews. He was buried along the mountainside of Tzfat and residents of Safed built a synagogue over his grave in the late 15th or early 16th century.
  
<div style="clear:both; margin:10px 20px 10px 25px;">__TOC__</div>
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== Miracle of the White Chickens ==
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During the [[Ottoman Rule of Safed 1517 to 1759|era of Ottoman rule]] the Jews of Tzfat witnessed a miracle in the name of Yossi Banai. A cruel Ottoman ruler demanded that the Jews bring him a specified number of white chickens and roosters. He warned that dire consequences would result if the chickens and roosters were not brought within three days. Almost  all of the chickens in Tzfat were multi-colored and the Jews of Tzfat panicked.
  
==Alternative to Business Loans ==
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Many residents prayed at the gravesite Rabbi Yossi Saragosi, former chief rabbi of Tzfat. Then they went to the Yossi Banai Shul, remaining there for three days fasting and praying. On the third night one of the residents who was sleeping at the synagogue dreamt that Rabbi Yossi Saragosi advised the Jews to bring their chickens to his grave. All the Jews of Tzfat brought their chickens and roosters to Rabbi Yossi Saragosi’s grave and returned the next morning to find all their chickens had turned white. The Ottoman ruler, seeing this miracle, relaxed his harsh rule over the Jews and the Yossi Banai synagogue became known as the “Tzadik HaLavan” --  the White Righteous One -- synagogue.
Technically merchant cash advances are not a loan, they are a sale of the companies future processing receivables at a discounted rate. Merchant cash advances are typically used by small businesses that do not qualify for bank loans.  
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===Advantages Over Bank Loans ===
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== Smicha - Rabbinical Ordination ==
Popularity of merchant cash advances is a direct result of the advantages it has over traditional bank loans.
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The Tzadik HaLavan synagogue played another important role in Tzfat with an unusual ordination of Tzfat’s greatest 16th century rabbis.  Rabbi Ya’akov Beirav, Safed’s Chief Rabbi during the early 16th century, wanted to reinstate “smicha,” the ordination of rabbis to the Sanhedrin. True smicha had been dissolved when the Sanhedrin dispersed during the Roman exile but Rabbi Beirav felt that the time had come to reestablish the authority that would unite the Jewish World and, he believed, bring the messiah. Tzfat’s rabbinical establishment supported Rabbi Beirav and ordained him, paving the way for him to bestow ordination on the great Tzfat rabbis, [[Rabbi Yosef Karo|Rabbi Yosef Caro]], Rabbi Moshe Metrani, Rabbi Moshe Galante, and Rabbi Moshe Cordovero. This ceremony took place at the Tzaddik HaLavan synagogue. Subsequently, worldwide rabbinical condemnations and  refusal to accept the reenactment of the Sanhedrin doomed the move and the initiative died out.
  
#'''High Acceptance Rate -''' Most small retail business have no collateral or do not have good credit and would get rejected by standard institutionalized lenders.
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== The Synagogue ==
#'''Ease and Speed of Application -''' Much less paperwork then required by banks.
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The Tzaddik HaLavan synagogue is located one level up from the ancient Tzfat cemetery, above the [[Ari Sephardi Synagogue]]. Visitors walk through through a courtyard to enter the synagogue whose interior is blue, a Kabbalistic motif reminiscent of the heavens. The raised center “Bima” -- central prayer area -- is next to an Elijah’s chair which is used for circumcision ceremonies. Visitors will see painted etchings of biblical instruments along the ceiling’s arches. A local family, the Shabbabos, care for the synagogue and open it for Sabbath prayers. The prayer service is conducted in the Sepharadi tradition.
#'''Payback Rate Fluctuates With Income Daily Level -''' This gives the merchant ability to keep their cash flow free during slow seasons of the business. As apposed to fixed payments required by business loans regardless of how profitable the month was. With a merchant cash advance there is no set due date on the loan and it is only repaid when sales come in. Even they are also suggested as beneficial by the financial experts like [http://www.carloshankrhonfunding.com/ Carlos Hank Rhon].
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Need it for buying inventory, expansion and renovation. Loan amounts are almost always lower then less than $150,000.
 
  
===Percent of Interest ===
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{{Tzfat Synagogues}}
Merchant cash advances are more expensive then bank backed business loans and the borrower must repay anywhere between 25%-100% over the lump amount that was given to him. Since cash advances are not officially a loan, funders are not bound by usury laws that would normally limit the interest rate they charge. This would normally be an equivalent of a 50% APR on a normal loan.
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{{Kivrei Tzadikim}}
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{{Safed History}}
  
===Controversy ===
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[[Category:Old Synagogues]]
Some people claim that merchant cash advance providers are in reality regular lenders just disgusting their loan to bypass the usury laws that limit the interest lenders can charge in many states. A federal class-action lawsuit has already been filed against a large cash advance provider for overcharging the permitted interest rate and another provider had to settle a lawsuit for $20 million. Merchant cash advance providers are fast to point out that they do take any collateral or personal guarantees and assume the full risk if the business fails. That draws a strong distinction between themselves and regular lenders
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[[Category:Safed]]
 
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[[Category:Kivray Tzadikim]]
==Payback ==
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Payback is normally done within a year of the cash advance. Under most circumstances the lender takes 20% - 25% of each credit card transaction until the amount of the loan and interest is fully paid back. Since cash advance providers try not to choke the business in thinner profit margin industries they take a much lower percent of the sales averaging at 9% and going as low as 1% in extremely thin profit stores.
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===Switch to Associated Credit Card Processor ===
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By taking a merchant cash advance loan the borrower agrees to use one of the lenders partner credit card processing companies. A borrower is normally given a choice of 3-4 credit card processor to chose from. If he is not already using one of them he must switch over. This is done as a security measurement for the lender who now has the ability to monitor all the borrowers credit card transactions and is guaranteed a hassle free collection of the designated payback percent of the sales. At the same time merchant cash advance funders take an affiliate commission from the credit card processor for getting them a new client.
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===Repayment Methods ===
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There are three accepted repayment methods in the merchant cash advance industry.
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*Split Withholding -
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*Trust Bank Account Withholding -
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*ACH Withholding -
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Some real payment figures $42,600 for $59,788. $20,000 for $27,000. $73,000 for $109,500
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Rules and Regulations
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They can not encourage customers to pay in cash, for example, and they cannot switch credit card processors
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==The Merchant Cash Advance Industry ==
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Industry began around 1998. It has grown significantly since 2007 and had over 50 active lenders as of 2010. This can be estimated as a minor 10% saturation of this potential $10 Billion lending market. Recent rise of industry is directly related to the global economic hardship at the time. Industry was pioneered by AdvanceMe in the late 1990's. As of 2010 there were no official regulations on the industry but most cash advance providers were with the realization that if they would not regulate themselves and their interest rates eventually the government would step in and force regulation.
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Renewal of cash advances are very easy and once a business has proven itself the providers are fast to issue out a second round on the loan. One large provider announced that three out of four customers renew their advances.
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[[Category:Loans]]
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Revision as of 18:52, 6 January 2013

Tzadik HaLavan Shul
Yossi Banaah Synagogue
Hebrew:
בית כנסת הצדיק הלבן רבי יוסי בנוי צפת
Pronunciation:
tz-a-deek ha-la-van, yos-si ba-an-ay
Other Names:
tz-a-deek ha-la-van, yos-si ba-an-ay
Spelling:
Banai, Banni, Bana, Banaa, Bannay, Bannah
Description:
Old Synagogue in Safed, Israel where the Tana Rabbi Yosi Bannah is buried.

The Tzadik HaLavan synagogue, also known as the Yossi Banai Synagogue, is unique in that it was built around a gravesite. The synagogue is one of the oldest in Tzfat and has seen continuous use for the last 500 years. Tzfat legend attributes miracles to the synagogue in the name of the rabbi for whom the synagogue was named.

Contents

Yossi Banai

Rabbi Yossi Banai was a Talmudic-era scholar. He studied with Rabbi Akiva in the years following the destruction of the Temple and the exile of the Jews. He was buried along the mountainside of Tzfat and residents of Safed built a synagogue over his grave in the late 15th or early 16th century.

Miracle of the White Chickens

During the era of Ottoman rule the Jews of Tzfat witnessed a miracle in the name of Yossi Banai. A cruel Ottoman ruler demanded that the Jews bring him a specified number of white chickens and roosters. He warned that dire consequences would result if the chickens and roosters were not brought within three days. Almost all of the chickens in Tzfat were multi-colored and the Jews of Tzfat panicked.

Many residents prayed at the gravesite Rabbi Yossi Saragosi, former chief rabbi of Tzfat. Then they went to the Yossi Banai Shul, remaining there for three days fasting and praying. On the third night one of the residents who was sleeping at the synagogue dreamt that Rabbi Yossi Saragosi advised the Jews to bring their chickens to his grave. All the Jews of Tzfat brought their chickens and roosters to Rabbi Yossi Saragosi’s grave and returned the next morning to find all their chickens had turned white. The Ottoman ruler, seeing this miracle, relaxed his harsh rule over the Jews and the Yossi Banai synagogue became known as the “Tzadik HaLavan” -- the White Righteous One -- synagogue.

Smicha - Rabbinical Ordination

The Tzadik HaLavan synagogue played another important role in Tzfat with an unusual ordination of Tzfat’s greatest 16th century rabbis. Rabbi Ya’akov Beirav, Safed’s Chief Rabbi during the early 16th century, wanted to reinstate “smicha,” the ordination of rabbis to the Sanhedrin. True smicha had been dissolved when the Sanhedrin dispersed during the Roman exile but Rabbi Beirav felt that the time had come to reestablish the authority that would unite the Jewish World and, he believed, bring the messiah. Tzfat’s rabbinical establishment supported Rabbi Beirav and ordained him, paving the way for him to bestow ordination on the great Tzfat rabbis, Rabbi Yosef Caro, Rabbi Moshe Metrani, Rabbi Moshe Galante, and Rabbi Moshe Cordovero. This ceremony took place at the Tzaddik HaLavan synagogue. Subsequently, worldwide rabbinical condemnations and refusal to accept the reenactment of the Sanhedrin doomed the move and the initiative died out.

The Synagogue

The Tzaddik HaLavan synagogue is located one level up from the ancient Tzfat cemetery, above the Ari Sephardi Synagogue. Visitors walk through through a courtyard to enter the synagogue whose interior is blue, a Kabbalistic motif reminiscent of the heavens. The raised center “Bima” -- central prayer area -- is next to an Elijah’s chair which is used for circumcision ceremonies. Visitors will see painted etchings of biblical instruments along the ceiling’s arches. A local family, the Shabbabos, care for the synagogue and open it for Sabbath prayers. The prayer service is conducted in the Sepharadi tradition.


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