Qualified Merchants Sales Training Guide

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QMS UNIVERSITY Training solutions to advance your business

Sales Training Guide Revised May 22, 2006

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Table of Contents

Company Overview 3 Market Place Opportunity 4 Product Features 5 QMS Sales Strategy 7 Seven Steps of the Sales Process 8 QMS Sales Funnel 14 Questions and Objections 15 Start with a Good Daily Plan 17 Cold Call Prospecting 18 Funding Grids 20 Funding Calculations 21 Submission Check List 22 Appendix A Glossary of Terms 23 Appendix B Risk Policy 24 Appendix C Letters / Contracts / Forms 25

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The QMS Capital Access Program About Qualified Merchant Services, Inc. QMS was established in 2000 QMS is one of the nations leading providers of alternative funding to small medium sized business owners. Funded nearly 5,000 locations representing over $50,000,000. We provide a fast, accurate and proven method for businesses to gain access to working capital by tapping into their future Visa and MasterCard sales volume. QMS buys a fixed amount of a merchants future Visa and MasterCard sales volume at a discount of approximately 26% to 33%. Through an innovative process, QMS is re-paid by taking a small fixed percentage from the merchants future Visa and MasterCard sales volume. In return the merchant will receive a lump sum of immediate cash that is wired directly into their bank account. As a result, there are: No fixed payments. No fixed timeframe for repayment. Repayment is completely automatic. QMS gets paid only when a merchant receives a sale. QMS IS NOT A LENDING INSTITUTION. Our products must not be represented as or spoken of in terms of loan products. Words and/or phrases such as loan, interest rate, payment term, turn, APR, principal or any other traditional lending institution language that would imply that our products are loan products or that QMS is a lending institution should be avoided. We provide a funding or an advance as an investment, not a loan. We have a discount rate, not an interest rate. Summary: Confidence: QMS provides a unique service that merchants need. Comfort as a sales rep: As the number one leader in its market. QMS: is a factoring company and not a bank. Like Factoring: QMS buys future receivables at a discount of approximately 26% to 33%. Were not a bank: The product is not a loan, its like venture capital for the small business owner. We tie our success to our customers success.

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Marketplace Opportunity Six (6) million small businesses in the United States. According to the Small Business Administration, Inadequate or ill-timed financing is a

major reason for small business failure. Demand for cash advance is fairly constant. Businesses always need money. Some are

more cyclical than others. About 5% to 10% are looking for money at any given time. Approximately 92% of business owners are refused loans from traditional lending. Why?

o No collateral o Insufficient time in business o Business or owner has less than perfect credit.

The Target Customer A typical customer is a businessperson with a small to medium sized retail establishment, restaurant or service business with one to five locations. The owner typically depends upon the business as their sole livelihood.

At least $1 ,750 of Visa & MasterCard volume per month. Be in business for at least for 12 months (there are exceptions):

o An existing client opening an additional location. o The Bronze funding program is used for all businesses with less than one year in

business. Provide four months of Visa/MasterCard statements. Prefer a fixed business location.

You should generally avoid these businesses:

Internet based businesses Credit Card transaction 100% internet based. Adult entertainment and adult retail establishments. Furniture stores and auto transmission repair centers. Home-based operations. Businesses on processing partners do-not-call list.

We will sometimes consider these business categories but the likelihood that they will be funded is very low. Only The Bronze product can be used with these businesses. Summary: QMS provides working capital to help businesses manage existing cash flow and to provide carefully timed funding to assure continued growth. A typical customer is a businessperson with a small to medium sized retail establishment, restaurant or service organization with one to five locations. The owner typically depends upon the business as their sole livelihood.

Cash flow is always an issue. Could use the money for expansion, improvement, repairs, ongoing expenses, new

equipment, advertising, advantageous buys, etc. Traditional lending sources typically refuse credit to small businesses as much as 92% of

the time. A broad market of opportunity. Be careful of high-risk industries.

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QMS Product Offering Product Features

Quick access to Cash. The cash advance is deposited in the merchants checking account within one to two weeks. Funding approval in 24 to 48 Hours. The remaining time taken is for processor setup and testing.

No bank hassles. Simple application with no collateral required. o The bank will require two to three years of tax records.

will require a list of collateral. will require a business plan. will require perfect credit ratings. will charge a credit application fee and points.

Repayment ease. The purchased receivables are automatically retrieved from the merchants credit card processing via a fixed percentage charge.

Product is geared to enhance cash flow. As a percentage of the merchants gross revenue, the retrieval rate stays at approximately 3 to 8.99% of gross sales.

o If a merchants business declines, the dollar amount retrieved also declines. o If a merchants business increases, the dollar amount retrieved also increases.

Additional access to cash is available. Renewal department will begin calling merchant once 90% of advance has been paid.

The funded amount is based on the merchants projected, future Visa and MasterCard sales volume.

By reviewing a merchants most recent four months of credit card processing statements we calculate an average monthly volume. (Seasonal businesses may require more statements).

This average is multiplied from between 5 to 12 months, depending on the funding product used to determine the merchants estimated future Visa and MasterCard sales volume.

We purchase a Specified Percentage of that estimated sales volume. A discount is taken from the resulting Specified Amount. The net amount, which is called the Purchase Price, is wire transferred into the

merchants bank account.

QMS currently has three funding products for businesses in operation 12 months or longer. These products are called Silver, Gold and Platinum: Silver Funding Program

Based on seven months of future Visa/MC sales volume. This means we multiply the merchants average monthly Visa/MC sales volume by seven months.

We can purchase up to 29% of this estimated V/MC sales volume. This percentage is called the Specified Percentage.

The merchant repays $1 .3526 for every $1 .00 they receive. For $10,000 in funding (the Purchase Price) QMS will receive $13,526, (the Specified

Amount). Funding from $2,500 to $150,000 per location.

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QMS Product Offering (continued) Gold Funding Program

Based on nine months of future Visa/MO sales volume. This means we multiply the merchants average monthly Visa/MO sales volume by nine months.

We can purchase up to 20% of this estimated V/MO sales volume. The merchant repays $1.45 for every $1.00 they receive. For $10,000 in funding QMS will receive $14,500. Funding from $10,000 to $150,000 per location.

Platinum Funding Program

Based on twelve months of future Visa/MO sales volume. This means we multiply the merchants average monthly Visa/MO sales volume by twelve months.

We can purchase up to 20% of this estimated V/MO sales volume. The merchant repays $1.50 for every $1.00 they receive. For $30,000 in funding QMS will receive $45,000. Funding from $30,000 to $1 50,000 per location. For restaurant industry only. Must not be a seasonal business or industry (40% change season to season).

For any merchant that has not been in business for at least 12 months, and cannot qualify under an exception, our Bronze Funding Program is available. This program can be used for some businesses in high risk categories: Bronze Funding Program

Based on five months of future Visa/MO sales volume. This means we multiply the merchants average monthly Visa/MO sales volume by five months.

We can purchase up to 20% of this estimated V/MO sales volume. The merchant repays $1.39 for every $1.00 they receive. For $10,000 in funding QMS will receive $13,900. Funding from $2,500 to $150,000 per location.

Summary: QMS offers four specially priced products based upon the merchants funding needs, timeframe for payment and the percentage of payments.

Merchant must change credit card processing to one of QMSs processing partners. The Purchase Price - the amount of funding the merchant will receive. The Specified Amount - the amount the merchant will pay back. The Specified Percentage - the percentage of the merchants V/MO processing volume

that goes to toward repayment. QMS Sales Strategy

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As a sales professional, wouldnt it be nice to never have to persuade your prospect to buy your product or service? Instead, your prospects would line up outside your door, eagerly trying to persuade you to sell your product or service to them. Reverse Selling is reversing your position in the sales process from the typical buyer/seller interaction. It has great benefit, as it diffuses the pressure and tension that is typically associated with a sales person and which is inherent in the buyer/seller interaction. It gives you an entirely new approach with new tools to help you let go of old behaviors and verbiage that often times brings you negative results. By operating in a manner opposite to what the prospect has come to expect from salespeople, the salesperson will have better control and direct the selling process. By using this concept of Reverse Selling, you will be able to:

Build customer rapport more quickly. Eliminate fears of being seen as too aggressive. End the sales chase, you know where you stand with your prospect. Genuinely relax prospects. Identify potential needs of a customer. Match solutions to needs. Provide you effective negotiation skills.

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Seven Steps of the Sales Process

1. Strong Opening 2. Conduct Analysis

3. Return on Investment

4. Confirm Next Step

5. Statement Received Call Back

6. Closing Part I

7. Closing Part II

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Step 1: Strong Opening: Start with (A) or (B) or Both Good Morning Mr. Merchant (A)Deliver a Compelling Reason: choose only one My company QMS provides cash for independent business owners (or industry specific.) Choose only one

1. Pre-qualified in 24 hours 2. We can advance you within 10-14 days. 3. Anywhere from 2,500 to 150,000

(B)Get Permission: choose only one

1. Do you have a minute to talk about receiving cash in the next 15 days? 2. Do you have a minute to talk about getting cash for your business? 3. Do you have a second to go over how I can wire you from 2,500 to 150,000 into your

business account? 4. Do you have a minute on how I can get you pre-qualified from up to 150,000 in 24

hours? Step 2: Conduct Analysis: choose only one

1. What projects are you working on that could use some additional working capital? 2. If I could get you cash from 2,500 to 150,000, what could you use the money for?

This is the most critical part in the conversation. Discovering or creating the need. Ask

questions so they can talk about their business!!!

The more they talk about their business the more they like and trust you. Rep: Tell me about your business? KEY POINT: Change pitch in voice to gain likeness. Example: Wow thats awesome! Rep: So Mr. Merchant, How will that (need) help grow your business? Thats GREAT! Step 3: Return on Investment: Mr. Merchant, How much you think you would profit monthly by (need)? (Make sure you get a dollar figure.) So youll be bringing in about $( ) in 2-3 years. WOW! Thats excellent! Rep: So, how soon do you need the money?

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Step 4: Confirm Next Step: Rep: Do you have a pen? (Get them moving toward a yes) Write this fax number down. Rep: The 1st step in the process is to verify the last 4 months of your V/MC volume. So I will need you to fax your statements to: Customer: Why do you need to see my statements? Rep: Our cash advance programs are based off your V/MG volume? So we need to verify your last 4 months V/MG statements? Customer: How does it work? Rep: The way it works is simple; because we are not a bank, we can provide you a cash advance based on your V/MG volume, not using any collateral or your personal assets? Rep: So when before three oclock can you fax your statements?

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Step 5&6: Statements Received /Closinq Part I This dialogue is for Face-to-Face /Telesales Sales Process Rep: Thank you Mr. Merchant. I have received your statements.

Now, the next 3 pre-qualifying questions, I will need just a yes or no response. However, I want you to keep in mind your response will only help us to determine what program fits you the best. Is that Fair?

Are there any bankruptcies (personal or business chapter 11, 7 or 13)? Are there any tax liens or judgments? Are you current with your landlord?

Mr. Merchant it looks like you have a great project thats going to help grow your business. Tell me again how much additional income you are going to make each month. (Let the merchant say the $$$$ amount). You are talking about $$$$ in 2 years! (Wait for an answer). WOW!!!!! Thats great!!!!!! You are exactly the type of customer we want to do business with. Based on your Visa/MC sales volume, it looks like you pre-qualify for $ to invest in your (name project), at this point. For your $_______________ (funding amount), it is going to cost you $ (the difference in the funded amount and the payback amount). Now, in order to get you the $_________ there will be a 20% daily payback from your Visa/MC sales. ]Eiais.neais that you will keep 80% of your Vaf MC sales, plus all cash, checks, American Express Merchant you will keep 92%-94% of your monthly gross revenue. Thats going to grow your business. Am I correct? Great! The process requires me to get additional information from you. (Fill out the paperwork and fax to the merchant / with the merchant-face-to-face) If the answer is NO (to the grow your business statement) What part of the $_________ is not going to help grow your business (Use the objection rebuttals provided you). If he responds Cost is too much or Its too expensive. Compared to what? How much would you pay for the money?

You just told me that you are going to make $______ (use ROI amt) with the use of the money. Are now telling me that you would let $______ (difference between funded amt)

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Step 5&6: Statements Received /Closinq Part I continued

and payback amount less the amount the merchant says) keep you for making $___________ (ROl amt)? PAUSE (dont be the first one to speak).

Complete the paperwork and fax to the merchant/face-to-face complete the paperwork and present to the merchant. Mr. Merchant after you fax the paperwork we will send you a shipping label to send back the originals. The next thing I need to discuss with you Mr. Merchant is the fact that there is no monthly billing; remember we get paid only when you get paid, therefore Mr. Merchant you will have to process with one of our preferred processors. The good news is that we will meet your existing processor rate. The final step is we are going to need to a voided check to wire the money into your account. When before three oclock will you fax back your application?

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Step 7: Closing II Mr. Merchant I have received your paperwork and your voided check for wiring the money. Everything looks in order. In the next 24-48 hours, our contract administration department will give you a welcome call to verify the information on your application. In addition, a Processor will also contact you to go over your rates. And if everything is complete we should fund the money for your (name the project) within 10-14 business days. Good luck on (name the project)!

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QMS Sales Funnel

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Questions and Objections Your initial goal is to convince the merchant to show you their Visa & MasterCard processing statements. Here are some suggestions using a trial close technique by simply asking for the merchants processing statements: Q. What is the interest rate?

Our program is similar to factoring; therefore there is no set interest rate, only a set cost. Because you say the word interest rate, I am assuming that you think we are a bank. It

that correct? (If yes, explain factoring). Q. How does it work?

We advance you funds using your future Visa/MasterCard sales volume. We then take a small percentage of Visa/MasterCard processing daily, while you keep all your Amex, Discover, Diners, Cash and Checks. Qualification is determined by reviewing the last 4 months of VisalMasterCard statements. Note: Goal to the sale is to move the prospect to provide statements and to define what the customer will want to do with the money.

Q. How much do I get?

If you provide us with your most recent 4 months of Visa/MasterCard statements I can tell you how much you qualify for.

Or $2,500 to $1 50,000 per incorporated location. I will need to see your most recent 4

months of Visa/MasterCard statements for me to tell you what you pre-qualify for. Q. How do I pay back the money?

We take a set percentage daily from your Visa/MasterCard sales. I will need to see your most recent 4 months of VisalMasterCard statements.

Q. Do I need to change my processor?

If the current processor is not on my list, yes. Our processor partner promises to meet your current rate. QMS would not partner with a processor that could adversely affect your cash flow.

Q. What if I dont want to change my processor?

Changing to one of our parent processors is a part of our funding program. Remember QMS retrieves the repayment amount from your daily Visa/MC

sales volume. The processor is required to allow this retrieval to be completed. Q. What if they dont meet or beat my rate?

We guarantee that we will meet your current rate for the processor. You have the choice to not take the money.

Q. How long does it take to get the money?

Ten to fourteen business days; provided you complete the paperwork and provide the necessary documents to me today.

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Questions and Objections continued Q. Can I get a deal like a bank? No. Because we are a factor company. We do not provide bank loans. Q. Im not familiar with QMS, Why should I deal with your company?

Please visit our website at www.QualifiedMerchant.com (if they have this liberty of time).

Additionally we have favorable ratings with the Better Business Bureau. If limited time and it is not an option for website access:

We have been in business since 1998 specializing in non-traditional fund. We are the largest provider of non-traditional funding in the nation. Backed by Brown Brothers Harriman and Wells Fargo Bank. Favorably rated at the Better Business Bureau. Have serviced over 10,400 clients with over $440,000,000 in funding in six years. No bank hassles. No collateral needed. Fast un-complicated funding in generally five to ten business days.

Summary: Use of the verbiage provided will afford you greater success in answering these questions. Remember you have an individual personality that will personalize the message. Thus allowing you not to sound scripted. Confidence in delivering your responses is key to close the sale. Understand you control the call and the ability to provide the merchant with working capital. The indication of a true merchant need is indicated in the merchant asking you questions. Questions such as how much or too expensive are opportunities to reverse Sell the products. Use it to your advantage and move to close by defining the need for the money and connecting the Return on Investment to paint the picture of increased revenue and bottom line business growth in profits.

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Start with a Good Daily Plan Establish a goal for each day (How much money do you really want to make!!!!) Consider

How many phone calls, how many face-to-face visits, how many sales If you secure a minimum of 50 Business Cards Daily. If you establish a minimum of 12 Customer Interest per week. If you ensure a minimum of 4 Statements per week. If you secure a minimum of 2 Submissions per week. This generates at least $55,000.00 per month.

Its the start that stops most people. Start your day in the morning by:

Following up by phone with prospects from your business cards, leads, etc. o Your plan should be for several hours, twice weekly (recommend: Monday &

Thursday). Request statements are faxed to you (prior to confirming appointment times with

prospects, if you plan to conduct a face-to-face meeting). o Advise the merchant that without the statements you are not authorized to come

out (if your plan to conduct a face-to-face meeting) o Advise the merchant the statements allow you to begin a pre-qualification in

determining what amount of money is available to the merchant, based on the V/MO card volumes.

(If you plan to conduct a face-to-face meeting) Cold Call prospects that are in the same location or near those appointments.

Create and write down a strategy for follow-up with prospects not immediately interested.

o Maintain a master calendar at all times (keep the calendar up to date).... o Place callback timelines based upon a two to three week increment; consider the

level of interest of the merchant. If you plan to conduct face-to-face meetings with the merchant, keep in mind that in the

afternoon, face-to-face cold call. Its a target rich environment. Summary: Successful people will develop a plan to hit their goals. If you have only two deals in your pipeline and you are fortunate to close 100% in the month, you still only have 2 deals. Keep the pipelines full prospecting, follow-up and asking for referrals.

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Cold Call Prospecting Direct contact marketing works the best by far. Face-to-face and telemarketing used in the proper mix will bring the best results. This is a relationship sale. Follow-up is critical to your success. Approach Use of the Seven Steps of a Sales Process. Gather contact information for future follow-up: Phone, Fax, Email address, mailing address. Ask everyone for referrals Generate referral partner network Follow-up Prospecting. Frequency of contacts = success. Follow-up with key prospects every two to three weeks. Use direct contact approach as often as possible. Ask for referrals. Other keys to successful prospecting Dressing for success, will ensure trust with the business owner. Work different hours. Many business owners work afternoons, evenings and weekends. Prospect while you are out dining or shopping. Being the customer gives you an advantage Dont waste your time on those who say No. Use the Reverse Selling technique. Lead Sources Your Yellow Pages. Open it up and start calling prospects. Your nearest shopping center. Drive in and visit some prospects. The Internet

o YellowPages.com o CitySearch o goleads.com o jjhill.org o info.usa.com

Chamber of Commerce Trade associations Networking clubs, banks Accountants Other B2B vendors Always ask for referrals Summary: Proficiency in use of the Reverse Selling technique, Return on Investment Approach and the Seven Steps of the Sales Process are the best methods to afford you great success. Be persistent!

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Cold Call Prospecting continued Just as with media advertising, you first words must create interest. Introduce yourself and continue with a short interest-getting statement such as:

Im Bob Jones with QMS We help business owners get money for their business If I could help you obtain some additional working capital, could you improve your

business? I was in the area for an appointment, but I wanted to take the few minutes I have to see if

you could use some money for your business. As I know you are busy, why dont we meet at some future date? I could work you in on (Date).

Ive got $85,000,000 to invest with business owners like you. I want to show you how much you can get.

We are a national funding company; we provide cash to help business grow. What could your use the money for?

Im opening an office locally to allow me to focus on the Economic Development of this community, by providing business owners with money to grow their business. Lets sit down for five minutes so I can show how much you can get.

To keep the conversation rolling you could then ask questions:

How long have you been in business? How much volume do you do with Visa/MO monthly? How much money could you use to grow your business? What would you do with the money? What projects could you consider?

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Funding Grids Available for all four funding products to help you calculate the average Visa/MC sales volume. The grids calculate:

The average Visa/MC sales volume (future receivables) The Purchase Price the amount funding The Specified Amount amount to be repaid The Specified Percentage the percentage added to the merchants processing

charges The Required Monthly Gross Volume

Have the Funding Grids Available

Using the average monthly V/MC sales volume you have calculated; go down the left- hand column of the funding grid until you come to the quantity closest to, without going over that volume.

Example: Lets say a Merchants most recent four months of Visa & MasterCard processing statements averaged $21, 000 per month. The funding grids indicate that the merchant could qualify for $21 500 with the Silver Funding, $26,000 with Gold Funding, or $33,500 in funding with Platinum Funding.

Use more data (more months of volume) if a merchant is seasonal, or if their sales volume dips by more then 30% season to season. This will help normalize the effect of seasonality.

The funding grids are based on QMS purchasing 20% of the clients Visa & MasterCard future receivables.

Required Monthly Gross Volume QMS will not deduct more than 8.99% of a merchants gross revenue (all cash, check and credit cards purchases). It is critical that the merchant provides their total gross sales accurately.

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Funding Calculations When You Cant Use Funding Grids It is very helpful for you to learn how to calculate Purchase Price, Specified Amount and Specified Percentage without the use of the funding grid. Lets say the merchant wants $25,000 instead of $21, 500. $25,000 now represents the Purchase Price. We need to determine the Specified Amount and Specified Percentage for Silver Funding. The Specified Amount is calculated by multiplying the Purchase Price by the retrieval factor rate of 1.3526.

Silver Gold Platinum Purchase Price (amt given to merchant) $25,000 $25,000 $30,000

Multiply by 1.3526 1.45 1.50 Specified amount we agree to purchase $33,815 $36,250 $45,000

The Specified Percentage is determined by dividing the Specified Amount by the Total Visa/MC future sales volume for next seven months.

Silver Gold Platinum The average Visa/MasterCard volume per month $21,000 $21,000 $21,000

Multiplied by the time projection period 7 9 12Total Visa/MasterCard future sales volume $147,000 $189,000 $252,000

Silver Gold Platinum

Specified amount we agree to purchase $33,815 $36,520 $45,000Divided by total Visa/MC future sales volume $147,000 $189,000 $252,000

Specified percentage 23% 20% 18% QMS will fund this deal for the following dollar amount:

The Specified Percentage is under 29%. The Specified Amount is no more than 8.99% of the merchants total gross sale amount. The merchant meets QMS risk criteria.

The 8.99% Covenant As a safeguard for the merchant, QMS has established a rule that we will not take more that 8.99% of a merchants gross dollars (all cash, checks and credit cards). The Monthly Gross Volume is the amount the merchant needs to say they have, or more, to qualify for the funding. The merchant just needs to tell you that he produces that gross volume or more to qualify for the funding on the same line.

The merchant does not have to prove this gross volume. We only require their verbal confirmation when our contract administrator calls during

the welcome call. Summary: Take the time to understand how to calculate merchant funding. Your commissions will increase. Multiple products allow you to position QMS products according to the needs of the customer.

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Your Check List (items for you to obtain, prior to submitting contract)

1. Signed Merchant Agreement completely filled out.

2. Photo copy of drivers license if no witness for signatures.

3. Voided check.

4. Four (4) months of complete statements, 12 if seasonal.

5. Processor application completely filled out with all signatures.

6. Administration Form with all fields completed.

7. Other documents if needed.

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Appendix A - Glossary of terms Here is a glossary of the five items that are generally calculated for each deal; the last three must go on the contract:

1. The average Visa/MasterCard volume per month a. For most clients, this is determined by adding the most recent four months of the

merchants Visa/MasterCard statements and dividing by four or; b. For seasonal businesses, this is determined by adding the most recent three

months of the merchants Visa/MasterCard statements and the four statements from last year, then divide by seven.

2. The total Visa/MasterCard volume (future receivables). Determined by multiplying

the average Visa/MasterCard volume per month by the appropriate projected sales period, seven months for Silver, nine months for gold and twelve months for Platinum.

3. The Purchase Price is the actual cash amount or funding the merchant receives from

QMS.

4. The Specified Amount is the total amount QMS retrieves from the merchants future Visa/MC receipts.

a. It also represents the amount of the merchants future Visa/MasterCard volume QMS purchased.

b. Is determined by multiplying the purchase price by the retrieval rate (factor rate) for the given funding product.

5. The Specified Percentage is the percentage of the merchants daily Visa/MasterCard

processing retrieved by QMS. a. It is also the percentage of the merchants future Visa/MasterCard volume QMS is

purchasing. b. It is determined by dividing the specified amount by the total Visa/MasterCard

volume.

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Appendix B - Risk Policy QMS approval qualifications include, but are not be limited to, the following: Time in Business

Merchant must be in business at least 12 months. This will be verified through multiple Sources.

Senior management may elect to fund a new business (on an exception basis) based upon: o Merchants prior business experience o The purchase of an existing business that uses QMS o The expansion of an affiliation already in the QMS program. o Overall credit worthiness. o Bronze funding should be used for businesses less than 12 months in operation.

Pay Habits - Satisfactory pay habits shall be determined through a review of both the business credit and all personal guarantors credit. All reviews include:

Two of the three major credit reporting files (Equifax, Experian or TransUnion) In the absence of the above credit reports, a Dun and Bradstreet report will be obtained.

Landlord verification to determine the timeliness of lease/mortgage Verification of processing statements Vendor verification DBA verification Verification of ownership Notice should be taken when a steady decline of accounts appears over the previous four

(4) month period. Possible seasonality Credit scores from internal credit models, business and personal credit reports

Automatic Exclusions

Businesses less than one (1) year old (refer to potential exception cases, noted above) Open bankruptcy on business or guarantor Business or personal bankruptcy discharged less than 12 months ago Unresolved tax liens in excess of $175,000 Significant unresolved judgments or public filings Declination by our credit card processors No business license Completely web-based business MC/Visa volumes below $1,700 per month More than 2 months in arrears on mortgage, or to landlord (subject to exceptions) Previous negative history with QMS (business, guarantor, or affiliation)

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Appendix C - Letters / Contracts / Forms

1. Employee Non Compete Agreement 2. Employee Confidentiality Agreement

3. Cash Letter Fax Cover

4. QMS Administration Form

5. AdvanceMe Contract

6. Net 1 Contract

7. My Merchant View Information

QUALIFIED MERCHANTS 191 Route 59 2nd Floor airmont, NY 10952 Toll Free: (866) 460-2274 Fax: (845) 356-2599

www.QualifiedMerchant.com

Our Business is Helping Others Build Theirs

NON-COMPETE AGREEMENT

For valuable consideration and as an inducement for Qualified Merchant Services; to employ (____________________________), the undersigned Employee agrees not to directly or indirectly compete with the Company during the period of employment and for a period of 1 (one) year thereafter and notwithstanding the cause or reason for termination. The term not compete shall mean that the Employee shall not, on Employees behalf or on behalf of any other party, solicit or seek the business of any customer or account of the Company existing during the term of employment or wherein said solicitation involves a product and/or service substantially similar to or competitive with any present or future product and/or service of the Company. The Employee hereby acknowledges that the Company shall or may provide Employee access to its customers and accounts in reliance of this agreement, and that this agreement is reasonably necessary to protect the Company.

This agreement shall be binding upon and inure to the benefit of the parties, their heirs, assigns and personal representatives. Signed under seal this (________________) day of (__________________), (_____________). ____________________________________________ Employee Signature ____________________________________________ Date ____________________________________________ Company Authorized Witness

QUALIFIED MERCHANTS 191 Route 59 2nd Floor airmont, NY 10952 Toll Free: (866) 460-2274 Fax: (845) 356-2599



CONFIDENTIALITY AGREEMENT

THIS AGREEMENT governs the disclosure of information by and between Qualified Merchant Services and (_______________________________) as of this ________ day of ________________, ____________ (the "Effective Date").

1. Definition Of Confidential Information

As used herein, "Confidential Information" shall mean any and all technical and non-technical information related to Qualified Merchant Services and Items stored on QMS.LOCAL Domain provided by either party to the other, including but not limited to (a) patent(s) and patent applications, (b) trade secret, and (c) copyrighted information (d) proprietary information-- ideas, techniques, sketches, drawings, works of authorship, models, inventions, know-how, processes, apparatuses, equipment, algorithms, software programs, software source documents, and formulae related to the current, future, and proposed products and services of each of the parties, and including, without limitation, their respective information concerning research, experimental work, development, design details and specifications, engineering, financial information, procurement requirements, purchasing, manufacturing, customer lists, investors, employees, business and contractual relationships, business forecasts, sales and merchandising, marketing plans and information the disclosing party provides regarding third parties.

2. Identification Of Confidential Information

If the Confidential Information is embodied in tangible material (including without limitation, software, hardware, drawings, graphs, charts, disks, tapes, prototypes and samples), it shall be labeled as "Confidential" or bear a similar legend. If the Confidential Information is disclosed orally or visually, it shall be identified as such at the time of disclosure.

3. Exceptions To Confidential Information

Each party's obligations under this Agreement with respect to any portion of the other party's Confidential Information shall terminate when the party to whom Confidential Information was disclosed (the "Recipient") can document that: (a) it was in the public domain at the time it was communicated to the Recipient by the other party; (b) it entered the public domain subsequent to the time it was communicated to the Recipient by the other party through no fault of the Recipient; (c) it was in the Recipient's possession free of any obligation of confidence at the time it was communicated to the Recipient by the other party; (d) it was rightfully communicated to the Recipient free of any obligation of confidence subsequent to the time it was communicated to the Recipient by the other party; (e) it was developed by employees or agents of the Recipient independently of and without reference to any information communicated to the Recipient by the other party; (f) the communication was in response to a valid order by a court or other governmental body, was otherwise required by law, or was necessary to establish the rights of either party under this Agreement; or (g) it was not identified as Confidential Information of the disclosing party in accordance with Section 2.

4. Handling Of Confidential Information

Each party agrees that at all times and notwithstanding any termination or expiration of this Agreement it will hold in strict confidence and not disclose to any third party Confidential Information of the other, except as approved in writing by the other party to this Agreement, and will use the Confidential Information for no purpose other than development with the other party to this Agreement. Each party shall only permit access to Confidential Information of the other party

to those of its employees or authorized representatives having a need to know and who have signed confidentiality agreements or are otherwise bound by confidentiality obligations at least as restrictive as those contained herein. 5. Confidentiality Agreement Residual Knowledge Recipient may use its knowledge retained in intangible form in the unaided memories of its directors, employees, contractors and advisors as a result of exposure to the disclosing party's ("Discloser") Confidential Information. The Discloser acknowledges that the Recipient may have in conception or development technology and/or software which may be very similar or even identical to Discloser's Confidential Information and, as long as the Recipient abides by Section 4 herein, Discloser shall have no rights in such technology and/or software. 6. Confidentiality Agreement Term And Termination This Agreement shall terminate two (2) year(s) after the Effective Date. The Recipient's obligations under this Agreement shall survive termination of the Agreement between the parties and shall be binding upon the Recipient's heirs, successors and assigns for a period of five (5) years. Upon written request of the other party, a party shall promptly return to the other all documents and other tangible materials representing the other's Confidential Information and all copies thereof. 7. Confidentiality Agreement Warranties Each party represents and warrants to the other party that (i) it has the requisite corporate authority to enter into and perform this Agreement, and (ii) its execution and performance under this Agreement, including its disclosure of Confidential Information to the Recipient, will not result in a breach of any obligation to any third party or infringe or otherwise violate any third partys rights. 8. No Export Neither party shall export, directly or indirectly, any technical data acquired from the other pursuant to this Agreement or any product utilizing any such data to any country for which the U.S. Government or any agency thereof at the time of export requires an export license or other governmental approval without first obtaining such license or approval. 9. No Reverse Engineering Each of the parties agrees that the software programs of the other party contain valuable confidential information and each party agrees it will not modify, reverse engineer, decompile, create other works from, or disassemble any software programs contained in the Confidential Information of the other party without the prior written consent of the other party. 10. No Grant Of Rights The parties recognize and agree that nothing contained in this Agreement shall be construed as granting any property rights, by license or otherwise, to any Confidential Information of the other party disclosed pursuant to this Agreement, or to any invention or any patent, copyright, trademark, or other intellectual property right that has issued or that may issue, based on such Confidential Information. 11. Equitable Remedies Recipient acknowledges that Recipients breach of this Agreement may cause irreparable harm to Discloser for which Discloser is entitled to seek injunctive or other equitable relief as well as monetary damages. 12. Confidentiality Agreement Miscellaneous Neither party shall not transfer or assign this Agreement to any other person or entity, whether by operation of law or otherwise, without the prior written consent of the other. Any such attempted assignment shall be void and of no effect. This Agreement shall be governed by, enforced under, and construed and interpreted in accordance with, the laws of New York without reference to conflict of laws principles. Each party agrees consents to venue and personal jurisdiction in Airmont, New York. If any provision of this Agreement is found by a proper authority to be unenforceable or invalid such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole and in such event, such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law. Neither party will assign or transfer any rights or obligations under this Agreement, including by operation of law, without the prior written consent of the other party. The Agreement is the complete and exclusive agreement regarding the disclosure of Confidential Information between the parties, and replace any prior oral or written communications between the parties regarding Confidential Information. This Agreement may be signed in multiple copies, each of which shall constitute the same instrument. Once completely executed, any reproduction of this Agreement made by reliable means shall be considered an original.

IN WITNESS WHEREOF, the parties hereto have caused this Confidentiality Agreement to be executed as of the _____________ day of _________________, ________ (the Effective Date). Qualified Merchant Services Authorized Witness Employee __________________________________________________ __________________________________________________ Print Name Print Name __________________________________________________ __________________________________________________ Signature Signature __________________________________________________ __________________________________________________ Title/Position Title/Position

QUALIFIED MERCHANTS

191 Route 59 2nd floor Airmont, NY. 10952 Toll Free: (866) 460-2274 Fax: (845) 356-2599 ext.



CASH FAX COVER DBA:

To: From:

Phone: Date:

Fax : Pages: 6

RE: Cash Advance Program

This facsimile transmission contains confidential information belonging to Qualified Merchants, (or its clients) that is intended solely for the recipient above. If you have received this transmission in error, please notify sender immediately.

Thank you for taking the time to speak with me today, I appreciate it, as I know you are busy. We certainly feel that our program will meet your requirements and we sincerely look forward to a long relationship.

PPrree--AApppprroovveedd ffoorr uupp ttoo $$550000,,000000 In order for me to provide you with a proposal please provide me with the requested information below. Administration Form (Included in Presentation) Last Four Months V/MC Statements Voided Check

We will expedite as soon as all the information is received. Once Again, I thank you and look forward to servicing your establishment in the years to come. Should you have any questions or concerns, please feel free to contact me at any time. I look forward to doing business with you. Please fax required material to (845) 356-2599. Sincerely,

Account executive

Yrs Owned:

%

Years: Months:%

Years:

% %% %

Yes NoYes NoYes NoYes No

Company: Contact: Phone:Company: Contact: Phone:Company: Contact: Phone:

Own Lease SQ FT:Contact: Phone:

Months:

Existing Acct #:

Fax to: 845-356-2599

Completed Application Last four months Processing Statements

Existing Acct #:Existing Acct #:Existing Acct #:

Cell Phone:

Sales Agent: Sales Agent #:Qualified Merchants

Phone: City - State - Zip:

Bank InformationBank Name: Bank Contact:

Mortgage Company:

Property InformationOwn / Lease:

Trade References

Monthly Rent:

Software Type:Contact Phone:

Return Policy:

Terminal Model:Printer Make: Printer Model:

Accept Amex:

Accept JCB:Accept Diners Club:

POS Contact:

Terminal Make:

POS System:

Gross Monthly Vol:Annual V/MC Vol:

Gross Annual Vol:Monthly V/MC Vol:

Total # of Terminals:Accept Discover:

Credit Card / Terminal Information

Phone / Maill Order:Manually Keyed:

Internet:Must Total 100%Visa / MasterCard: Card Swipe:

Length at Residence:Residence Address: City - State - Zip:

Social Security #:

Home Phone:

Position:Drivers License #: Drivers License St:

Principal # 2 Percentage of Ownership

Date of Birth:Full Name:

Home Phone: Cell Phone:City - State - Zip:Residence Address:

Length at Residence:

Full Name: Social Security #:Date of Birth:

Drivers License #:Position:

Drivers License St:

Product Sold:Principal # 1 Percentage of Ownership

Email: Website:Phone: Fax:

Contact Name: Position:

Qualified Merchant Services Administration FormMerchant Information

Type of Entity: Corporation LLC Partnership LP LLP Sole Proprietorship

City - State - Zip:City - State - Zip:

Bus. Legal Name: Doing Business As:

Federal ID: Bus. Start Date:

Physical Address:Billing Address:

Settlement Bank: Harris BankLead Source:

General InformationOwnership Type:

Yrs Mos Owned: Yrs MosLegal Business Name: Business Name (DBA):Mailing/Billing Address: Location Address:City: St.: Zip: City: State: Zip:Corp. Phone: Corp Fax: Loc. Phone: Loc. Fax:Contact Name: Email: Customer Service Phone (if MOTO/Internet):Web Address: Federal Tax ID: D & B:Location: # of # Current Customer: Current MID:General Comments:

Name: Name: Name:Title: Title: Title:Address: Address: Address:City: City: City:Zip: Phone: Zip: Phone:SSN: SSN: Zip:

Email:DOB:

Type of Bus:Monthly Vol: Card Present-swiped : Discount Paid:Average Ticket: Card Present-keyed : Direct To Consumer:Highest Ticket: Card Not Present-keyed : Direct To Business:

Card Not Present-internet : Direct To Government:Total: must Equal 100% Total: must Equal 100%

Describe Specific Type of Product/Service Sold:Days until product delivery: Describe your return policy:Seasonal Merchant: Current Processor:Seasonal High Months:

Rate 2 = Rate 3 = Bus 1 = Bus 2 =

Application Fee: American Express: Minimum: Annual Fee:Mobile Setup Fee: Carte Blanche: Statement:Expedite Fee: Diners Club: Support: Chargebacks:Equipment: Discover: Gateway Access: Signature Plan:Tele-Training Virtual: JCB: EBT Access:Tele-Training Physical: Pin-Debit: Debit Access:Reprogramming Fee: EBT: Mobile Access:Lease/Rental Deposit: Mobile (additional): Online Reporting:Tax: Voice Authorization:Total: ARU Authorization:How do you want to handle Up-Front Fees?

Name on Check: Check #: Check Date:

MERCHANT PROCESSING APPLICATION

Corp Partner Assoc/Est/Trust Sole Prop Govt Inernatl Corp, LLC Med/Legal Non-Prof/Tax Exempt (fed form 501c)

Early Termination: If Company cancels this Agreement during the term or any agreed upon extension term, applicable early termination fees shall be due VERUS. See Article V Section 5.01 of the attached terms and conditions for additional details.

Owner/Officer 2:

State:

VERUS ISO VERUS ISO

AMEX PIP (Visanet/Paymentech w/ AMEX software) - addl paperwork reqd CVV NXT (Paymentech Only) - additional paperwork required

Printer (1) QTY Provider - if not Merch PinPad (1) QTY Provider - if not Merchant

Split Dial (Visanet Only) Purchasing Card

Email:

Retail Restaurant Autoclose

Supermarket Server

Add. Verification (avs) Invoice #

Account #:

VERUS ISOVISANET: Term Paymentech: Term Host

Hotel Tips

MOTO [card not present]

Phone:

Terminal Application Terminal Program Provider - if not Merchant

ACH - Merchant Drafted by NET1 Merch Check ISO Check

State:

Underwriting Profile

Terminal Hardware / SoftwareTerminal/Software Type (1) QTY

Settle Network: TSYSAuth Network: Vital Paymentech

Application ID:Association:

1501 Farm Credit DriveSuite 1500Mclean, Virginia 22102Phone: (703) 848-2980*

Owner/Officer 1:

%

State:

%

DOB:Email:

0.00%0.00%

Internet MOTO Retail Method Of Sales % Of Products Sold

Trade Reference

Yes Visa/MasterCard Credit

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecSchedule Of Fees Part I

Accept? Card Type

Yes No

Monthly Fees Annual Fees

Miscellaneous Fees

Rate 1 %

Per Item

Qualification Exeptions (If Applicable) Rate 1 Plus

Schedule Of Fees Part II

Office Name: Office Phone:Application Date: Contractor Name:

$0.00

Up-Front Fees

In Business:

Authorization Fees

Phone #: City: State: Zip:Transit # (ABA Routing - 9 digit): Account #:

Amex JCBDiscover EBT FSCDiners Club Carte Blanche

Leasing Company: Training Virtual Prods: Reprogram:Lease/Rental Type: Training Physical Prods: Debit:Lease/Rental Term: Expedite Bankcard App: Online Reporting:Monthly Lease/Rental Amt:

Merchant: By: X By: XMerchant Principal or Corporate Officer Merchant Principal or Corporate Officer

Print Name Print Name

Accepted by Bank: Accepted by Verus Card Services, Inc.:

X , An Individual Date: X , An Individual Date:

Print Name Print Name

LOC. Type:Merchant: Landlord Name: Landlord Phone:Does Business Appear Legitimate: Comments: Other (describe):Is site photo included with Application: Is business Open and Operating:Is inventory sufficient for Business Type: Are Visa and MasterCard decals visible:Are Goods and Services Delivered at Time if Sale: Any Mail/Telephone Order Sales Activity:

Sales Respresentative - Signature: Sales Representative - Printed Name: Date:

By the signature below, signatory verifies that (i) he/she has physically inspected the Business Premises; and (ii) the information stated in this Agreement is correct, to the best of his/her knowledge and is represented by his/her Company.

Retail Store Office Building Industrial Building Residence Trade Show Other (Describe)Site Inspection Information (To Be Completed by Sales Rep)

Personal Guaranty

Opt OutMonth(s)

Certification and Agreement

Yes No

Miscellaneous Ladco Lease Rental

Yes No Yes No

Yes No Yes No

Acct #:Acct #:

Existing Existing Existing

New Existing Existing

Acct #:Acct #:Acct #:

Other Entitlements New Existing Acct #:

Authorization To ACH (Must include Voided Business Check)Bank Name:

VERUS ISOPrinter (1) QTY

VERUS ISOProvider - if not Merch PinPad (1)

Retail

Autoclose MOTO [card not present] Purchasing Card Restaurant Server Tips Invoice #

VISANET: Term Paymentech: Term Host VERUS ISO

QTY Provider - if not Merchant

AMEX PIP (Visanet/Paymentech w/ AMEX software) - addl paperwork reqd CVV Split Dial (Visanet Only) NXT (Paymentech Only) - additional paperwork required

Supermarket Hotel Add. Verification (avs)

*NET1 Payment Services is an affiliate of Verus Card Services.Provider - if not MerchantTerminal/Software Type (2) QTY Terminal Application Terminal Program

Yes No Yes No

Yes No

Owns Leases

Yes No Yes No Yes No Yes No

In WITNESS WHEREOF, the parties hereto have executed this Agreement as of this day

By signing below, the Merchant named: (1) certifies to Verus Card Services that he/she is authorized to sign this agreement; (2) certifies that all information and documents submitted inconnecting with this Application are true and complete; (3) authorizes Bank or its agent to verify any of the information given, including credit references, and to obtain credit reports (including aspouse if in a community property state); (4) as read, agreed to, and acknowledges receipt of the terms and conditions of the Merchant Processing Agreement, attached hereto and incorporated herein by reference. The terms and conditions and this Application constitute the entire integrated Merchant Processing Agreement by and between Merchant, Verus CardServices and Bank; (5) agrees that Merchant and each transaction submitted to Bank will be bound by the Agreement in its entirety; and (6) agrees that Merchant will submit transactions toBank only in accordance with the information in this Application and will immediately inform Verus Card Services, Inc. in writing at the address above if any information in this Applicationchanges. The Agreement will become effective only when signed by Bank and Verus Card Services, Inc. Merchant further acknowledges that, as used in this paragraph, "Bank" means the banking institution indicated by appropriate mark in one of the check boxes located at the top of the first page of this document. By signing below, I represent that the information I have provided on the Application is complete and accurate and I authorize American Express Travel Related Services Company, Inc(American Express) to verify the information on this Application and to receive and exchange information about me, including requesting reports from consumer reporting agencies. If I ask American Express whether or not a consumer report was requested, American Express will tell me, and if American Express received a report, American Express will give me the name andaddress of the agency that furnished it. I understand that upon American Express' approval of the business entity indicated above to accept the American Express Card, the Terms andConditions for American Express Card Acceptance ("Terms and Conditions") will be sent to such business entity along with a Welcome Letter. By accepting the American Express card for thepurchase of goods and/or services, you agree to be bound by the Terms and Conditions.

In consideration of Bank and Verus Card Services, Inc.'s acceptance of the Agreement, the undersigned Guarantor (jointly and severally if more than one) unconditionally guarantees theperformance of all obligations of Merchant to Bank and Verus Card Services, Inc. under the Agreement, and payment of all sums due there under, and in the event of default, hereby waivesnotice of default and agrees to indemnify Bank and Verus Card Services, Inc. for all funds due from Merchant pursuant to the terms of the Agreement. This is a guaranty of payment andperformance and not of collection, and in no case will Verus Card Services be required to attempt collection from Company or pursue any other remedy or action before collection fromGuarantor. Guarantor waives any and all rights of subrogation, reimbursement or indemnity derived from Merchant and all other rights and defenses available to Guarantor under applicablelaw, including California Civil Code Sections 2787 to 2856, inclusive (or any similar suretyship laws), and further waives any and all rights, defenses or notices arising by reason of anymodification or change in the terms of the Agreement whatsoever, including without limitation, the renewal, extension, acceleration, or other change in the time any payment or other performance there under is due, and /or any change in any interest or discount rate of fee there under. Guarantor confirms that Guarantor, collectively or individually, is an officer orshareholder to the Merchant and party to the Agreement, and unconditionally and specifically authorizes Bank, or its authorized agent, to debit any overdue fees, costs, charge backs, fines,penalties, expenses or obligations under the Agreement and / or any contractual relationship with Bank, or Verus Card Services, Inc. from any personal checking account or other account owned or controlled by Guarantor, and further to report any default hereunder on Guarantor's personal Credit Bureau Report. Guarantor agrees to pay all costs and expenses of whatevernature, including attorneys' fees and other legal expenses, incurred by or on behalf of Bank or Verus Service, inc. in connection with the enforcement of this Guarantor. Guarantor furtheracknowledges that, as used in this paragraph, "Bank" means the banking institution by appropriate mark in one of the check boxes located at the top of the first page of this document.

85 LAFAYETTE AVE, 2ND FL, SUFFERN, NY 10901 p: 866 460 2274 / 845 368 3865 f: 845 368 3867 www.qualifiedmerchant.com

COMPLETE ACCOUNT MANAGEMENTIS AT YOUR FINGERTIPSThe most effective means of accessing and maintaining the QMfamily of products and services is through the direct participation of our customers.With just the touch of a button and click of amouse, you can tap into your own private portal of safe, secureonline business tools and account management resources backedby instant access to account and technical support.

MY MERCHANT VIEWMy Merchant View is an innovative online service that provides awide variety of merchant bankcard account information available toyou through your own Personal Computer. By simply and securelylogging-on to the My Merchant View website, users can interact witha large, centralized database of payment processing information.

My Merchant View offers you the ability to...

Enhance your cash-flow management practices

Reconcile your business checking account

Investigate and resolve charge-backs

Conduct daily sales audits

Identify non-qualification losses

Perform historical and trend analyses

The My Merchant View system provides real-time data within 24 hours after a batch of transactions is processed.

ONLINE FORMS & APPLICATIONSThe capability to apply for approval or learn more about our cash advance solutions, card processing solutions,Point-of-Sale equipment, or other products and services is also just a website away.

The Qualified Merchants website contains quick-fill anddownloadable forms for basic information, processingapplication, cash-advance pre-qualification, and more.You caneven purchase or arrange for the lease of any item from ourlarge selection POS terminals, printers and other equipment.

Please visit our website or call the number below to learnmore about our suite of online resources or any otherQualified Merchants services.Wed love to hear from you!

Qualified Merchants Sales Training Guide

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