The average business owner carries over $195,000 in debt. If you're struggling with MCA debt, we can help. Read this article to get a better understanding of how we are able to provide you with the relief you need.
The issue with MCA debt is it is an advance on your future sales/receivables. MCA debt is not a loan. Individuals usually turn to a merchant cash advance when their company is low on cash, they cannot get money from the bank and or they need money fast.
For repayment, the MCA lender will decide on a one-time fee that will go to repayment. The lender determines this fee based on its risk assessment and the borrower’s ability to repay. If you are working with a broker, they also add their fees to your already expensive advance.
Often, borrowers focus on the payment amount and don’t realize how much the overall debt is. The repayment process typically takes place over 3 to 12 months. Yet, because the payments are generally daily or weekly payments, it can be challenging for individuals to repay. Miss one payment and the lenders can legally freeze all your accounts including your merchant processing.
There are two more additional reasons that repayment can be difficult. First, every business is going to have highs and lows. When a company hits a low, it might struggle already, compounded by the additional daily and or weekly MCA payments.
The second issue with MCA debt is the fees are incredibly high. The majority of MCA have rates that exceed .35 cents on the dollar. If you’re working with a broker, add an additional .10-.15 cents on the dollar to what’s already ridiculously expensive.
Luckily, there are two great options to resolve MCA debt. Before we discuss how our service is the best option, it is vital to address a couple of options that are more problematic than helpful. This information is to help you avoid future traps. The two main problematic options are stacking and MCA reversals.
Some companies handle their MCA debt by using additional cash advances to fix the problem. This process is called stacking, and it can be expensive and only creates further issues.
The more debt you bring on, the more expensive it is because the risk is higher. All you are doing is borrowing more money to make the payments for the old. It’s only a matter of time before the business is overleveraged and missing payments or even worse, filing for bankruptcy.
A reverse consolidation takes multiple MCA debts and combines them into one. The borrower then makes one payment that is less, and the business pays each of the monthly payments for them. The issue is that the company offering the consolidation doesn’t pay off the MCA debts but is just a second-party payer. So, if the borrower can’t make their payment, the company will stop making the payments overall. Now you owe the reverse consolidation company the amount you agreed to pay them plus all the original lenders the money you owe them. At this point, all your accounts are frozen. Thus, in the end, there are only two main helpful options: restructuring with MCA Debt Advisors or paying the full amount you owe the lenders organically and hope you never miss a payment.
Most lenders’ goal is to get paid. Thus, a business losing money is counter to their goal; because of this and our already established relationships with the lenders, they are willing to work with us to pay off your debt. Debt restructuring usually involves paying a new amount that the individual is capable of repaying. With us, it is one payment every two weeks (14 days). We also reduce the total amount you owe the lender(s) and free up over 50% of your monthly cash-flow by drastically reducing your payments.
In 2022, there were about 33.2 Million Businesses in the United States. Most of these individuals went into business to follow their passion or become their own boss. They are working to achieve that dream and make the best financial decisions. Yet, 29% of new businesses will shut down due to a lack of financing. The majority will struggle to figure out how to maintain enough funds. You are not alone in your issues with cash flow. You are not alone in turning to MCA Debt Advisors as a solution. The MCA market generates 30+ billion dollars a year. That means that millions of companies have turned to them for support and got nothing. The good news is you are not alone in the business debt restructuring process either. We help 400+ businesses every month get back their freedom and out of the shackles of MCA payments.
We consider ourselves the Robin Hood of the industry. If you are struggling with MCA debt or just want to free up some much-needed cash flow, reach out today. Help is only a call or email away!
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