How to Eliminate Merchant Cash Advance Debt
Many small businesses struggling with Merchant Cash Advance (MCA) repayments take a second or third advance to keep afloat but actual fact they may be getting themselves deeper into financial trouble. Multiple MCA’s can very quickly eat away at your bottom line making it difficult to honor other financial obligations. Although many small businesses owners are comfortable paying a daily portion of their sales to a MCA provider, they do not realize that they are paying a very high rate. Making a small daily payment as opposed to a large monthly payment may seem convenient, but you are paying much more in the long term and your business will eventually suffer the consequences. Our experts discuss a few way in which you may eliminate Merchant Cash Advance debt.
Low Rate Term Loan
Taking a long term loan with a low interest rate may help you get out of a MCA. By taking a low rate long term loan, you may be able pay off your MCA and pay a lower monthly installment towards the loan instead.
This will require good credit history and the loan will have be at lower monthly payment amount. The payment term is usually 2 to 5 years. The interest rates can vary from 6% to 30%. The MCA amount owing usually does not allow for early payment so you may have to pay the entire MCA amount .
You may have to satisfy the following criteria to qualify:
- 600 credit score or higher
- Be profitable in one of the past two years
- Have tax returns for the last two years
- No bankruptcy in the past 7 years
These loans can be a huge benefit if you qualify.
Asset Backed Loans
If you do have collateral such as property, machinery, equipment or any other assets, you may use this to get capital to pay off your MCA. You will be paying a lower interest rate. However, if you default, you may stand the risk of losing your assets.
You can renegotiate your business debt. It is recommended to hire an experienced business debt relief lawyer if you decide to enter into debt negotiation. Not only will the lender take you seriously, but having a professional by your side will help you get the best possible deal. Several businesses have been able to avoid filing bankruptcy by renegotiating debt payments.
If all your options have been exhausted and you cannot keep up with daily payments, you can file bankruptcy. Depending on your specific situation, filing bankruptcy may wipe out a portion or all of your Merchant Cash Advance debt. Our attorneys at ZocLaw.com have helped many business owners eliminate Merchant Cash Advance debt. Schedule your free initial consultation to find how we can help you. Also see: