Consolidate MCA Loans Fast and Effectively

Merchant cash advances provide the needed cash for businesses in need of working capital. Qualify for this type of small business cash advance is easy, making them an attractive option for quick funding. Your daily payments are made from a percentage of your credit card sales. These type of loans are  easy to qualify for in comparison to traditional consolidation loans. The main two things you need to qualify is having a merchant account and accepting credit cards. They do, however, come with high interest and fees. When a business experiences a downturn in revenue, merchant cash advances become much harder to manage. This is when MCA consolidation through a restructuring program becomes a viable option for getting payments manageable again.

Payments becoming unmanageable is especially likely when a business takes out multiple MCA’s. By stacking high interest cash advances in this manner, a business can over-extend themselves despite good sales. If the business does a lot of cash transactions, this can help them to stay cash-flow positive because MCA payments are taken out of credit card sales, not cash sales.

How Does an MCA Consolidation or Reverse Consolidation Work?

Getting additional MCA loans when you are already struggling to make payments is never a good option. Since credit score isn’t a factor and collateral isn’t required, it’s easy for business owners to go this route. But there are better options to deal with these situations. An MCA consolidation or a reverse consonsolidation are more viable and practical options. These options gives you relief from your MCA’s without the need of stacking on additional debt. 

A reverse consolidation doesn’t consolidate your debts in a traditional way. Rather than paying off your debts, the reverse consolidation company makes your daily payments and allows you to pay them back over a longer period of time. The payments are smaller than what they were, but the total payback will be more. This is a good option when compared to taking out more debt. And unlike bankruptcy, a reverse consolidation won’t negatively affect your credit score.

We renegotiate the terms with your lenders. You will pay back your full agreed outstanding balance, but over a longer period of time. This allows you to keep more of your income and keep your business operating smoothly. 

Consolidating your merchant loans will allow you to stay in business by giving payment relief on your business debt. Working with a business debt restructuring company is in your merchant leander’s best interest. If you are forced to close, that’s not good for them either. If you have no choice but to shut your doors, there’s a high likelyhood your lender won’t get any further payback.

Once the restructured plan is implemented, you will just need to stay current with the payments. This will allow you to become cash-flow positive and pay down your merchant debts over a much more manageable term. 

Should I Just Get Another Merchant Cash Advance Loan?

Downside of Merchant Cash Advances

Cash advance loans are meant to be a growth tool for businesses, but they have their downside. The downside includes higher than average interest, short term pay back and daily payments.

If a company doesn’t borrow more than they can handle, they can usually manage the repayment. The downside is still there, though. We will highlight three reasons why exploring other funding options is a good idea.

1) MCA’s Have Higher than average interest rates 

Merchant loans are only secured by payments made to your business via credit card. This makes them higher risk than loans backed by collateral. And since these are higher-risk loans, they come with a higher than average interest rate.

When you combine the shorter than average term with a higher than average interest rate, they can become unmanageable quickly. Especially when there’s a downturn in revenue.

2) Shorter than average terms

Not only do MCA loans require payments daily, but the overall term is short in comparison to tradition loans. A repayment term typically ranges from eight to nine months. Businesses doing very well can pay them back in a shorter timeframe, if desired.

On the flipside, some merchant cash lenders may be willing to extend the term as far out as eighteen months.

3) Daily payments

If a business is doing well financially, daily payments are not necessarily a nuisance. It’s when a business is having trouble just funding their day-to-day operations that it quickly turns into a hardship situation. The daily payments can become crippling and leave you with a negative cash flow and a lot of stress. This can be a tempting time to consider another short term loan to stack on top of the others as a quick fix. But this is just that, a quick fix. This type of fix will only compound the sutuation negatively in the end. There are many alternatives, however, that won’t compound the situation. One of those would be an MCA Consolidation program through a business debt restructuring company.

Qualifying For an MCA Consolidation Through a MCA Restructuring Company

If you are overwhelmed from one or more Merchant Cash Advances and you do n’t have the credit or financial wherewithall to obtain a traditional consolidation loan, consolidating through a debt restructuring program can be your next best option. If you have multiple MCA’s and are struggling to keep up with the payments, qualifying for a traditional mca consolidation loan will be difficult. This is because traditional lenders will view you as high-risk.

An mca consolidation program through a restructuring company is a highly effective alternative. This type of program makes payments manageable and gets your cash flow positive again. The debt restructuring company you’re working with will negotiate a longer term, typically, allowing you to save as much as 50% on your payments. This is definitely a better option when compared to taking out another high interest, short term loan to cover any shortfall. This will only be a short term fix that will ultimately make a financial shortfall worse.