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Cash Now (CHNW) Executes Agreement In Principle To Acquire An ATM Network Enterprise And A Factoring Company
PR Newswire "US Press Releases "
FORT LAUDERDALE, FL, Oct. 20 /PRNewswire-FirstCall/ - Cash Now Corporation (CHNW.PK) www.cashnow.com (Cash Now) today announced that it has executed an agreement in principle to acquire an ATM enterprise business and a factoring company for an undisclosed sum in cash and stock. Over the next couple of weeks Cash Now management and their advisors will be conducting due diligence on both of these 2 separate private companies, for viability, revenue generation and client base. "The ATM business looks extremely attractive to us," says Kevin Price, Cash Now's CEO. He added, "we have been provided with unaudited statements of this company with sales of over 1.5 million dollars in 2005. This company does not collect interchange fees from the processor and those fees could be substantial to Cash Now's bottom line." Interchange fees paid by merchant-acquiring banks to cardholder-issuing banks are in place to cover the cost to convert a charge on a cardholder's card to a cash deposit at the merchant business checking account, including cost factors like billing services, credit and fraud risk, profit, etc. All payment systems utilize Interchange as a key driving component in forging markets. All card products have Interchange: Discover, American Express, Diners, Debit, and even smart cards. Interchange fees are particularly fundamental with charge cards whose balances are paid in full each month. Interchange is important to a payment system because it facilitates growth. Technology advances have made it easier to implement and manage a wide array of specialized Interchange rates and fees by card type and merchant. New indicators built into the system will allow not just by industry segmentation, but merchant segmentation within an industry.
When asked about the factoring company Mr. Price added "Cash Now is a sub prime lender and this acquisition would open the door for us to service both the B2B and B2C market place. We see factoring as a payday loan transaction for businesses, so it is a natural fit for us" Factoring goes by many names, including invoice discounting, receivables factoring and debtor financing. In simple terms, factoring is a practice wherein one company purchases a debt or invoice from another company. It refers to the acquisition of accounts receivable, which are discounted in order to allow the buyer to make a profit upon collection of monies owed. Factoring transfers ownership of such accounts to another party that then works vigorously to collect the debt.
While factoring may allow the liable party to be relieved of the debt for less than the full amount, it is generally designed to be more beneficial to the factor, or new owner, and the seller of the account than to the debtor. The seller receives working capital, while the buyer is able to make a profit by buying the account for substantially less than what it is worth and then collecting on it. Factoring allows a buyer to purchase such accounts for about 25% to 50% less than what they are actually worth.
ABOUT CASH NOW
Cash Now Corporation (CHNW.PK), a pioneer in the Internet payday loan, and check cashing industry is developing the most comprehensive menu of services in the cash advance industry, all centered on the Cash Now brand. For instance, the Cash Next Super Broker concept is taking North America by storm! Our team of highly qualified financial executives know what works, and what it takes to place your loan request! Cash Next is backed by a highly experienced team, delivering blue chip solutions for businesses, and consumers. The company's proven business model includes licensing to corporately operated joint venture locations across the U.S., Canada, Australia, and UK. Cash Now offers a Payday Loan License program, Payday Express; a Payday Loan and Check Cashing License known as Check Express and an Authorized Agent Program for existing retail establishments; as well as a host of related financial services for small and medium-size businesses this includes the Cash Next broker program. Cash Now with its web based and focused outlook has won the Golden Web award in 2001, 2002, 2003 and 2005. In 2005 Profit Guide magazine ranked the Cash Now Group 10th in its list of the 50 fastest growing and most promising emerging companies. In 2005 Cash Now was ranked (#) 44 out of top 1000 fastest growing franchising companies by Entrepreneur guide.
SOURCE Cash Now Corporation
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