Have you missed payments on a cash advance or business loan? This article will go over how to handle your business loan if it is past due.
There are several fixes you can take when you are behind on your mca merchant cash advance payments or business loan. These steps and others can or make it much less severe. One step is to payoff the past due loan by refinancing.
Contact us below for help on how to fix missed payments on a mca merchant cash advance or business loan you have missed payments on, or cannot pay any more on.
Secure DocuSign 30 Second Application here.
Call us at Tel: 1-919-771-4177, or Question? Contact us here.
How to fix missed payments on a mca merchant cash advance or business loan and what to do when you are behind.
- Step 1 Contact the lender. Let them know you are having trouble paying the advance or loan. Be prepared to answer why you cannot pay it and how you will plan to catch up.
- Step 2 Ask the lender to work with you. Ask for lowered payments or suspended payments. If they refuse ask them to offer you a plan for payments you can handle. Determine in advance what you are able to pay. Tell the lender what you can pay and ask them to set up a payment plan for that.
- Step 3 Follow through on your agreement.
- Step 4 *How to Tip: If you will not be able to continue paying the cash advance or business loan, ask the lender for options. There are often options available just by asking for help or letting the letting know you cannot continue to make the payments.
What if you cannot pay the cash advance or business loan and cannot catch it up?
If you cannot continue paying the cash advance or business loan, ask the lender what the options are. For missed mca payments, there are good options for past due borrowers.
If it is not a mortgage loan, the best solution is usually to try to work with the lenders. When that is not possible, other options include:
1. Pay a settlement on the mca merchant cash advance or business loan.
If you consider this option, negotiate hard with the lender on how this will be reported on your credit. You want to push for the best possible credit bureau reporting of this event. If the lender reports the tradeline as “settled for less than full balance”, this may be the best reporting.
2. Applying with another lender
This is another excellent option if you can qualify. Payoff the cash advance or business loan with another loan. This works well if the balance of the loan you are past due on is low. If your current past due loan has not damaged your credit too much yet, this option may work.
3. Another option is to ask your current lender to modify the loan.
Your current loan is $500 per month and was for 48 months. You have 10 months left. Ask the lender to modify the mca cash advance or loan for a lower payment and for more months. In this case, ask them to lower it to $200 to $300 per month for 20 and 25 months.
Tell them this benefits both them and you. You will have a payment you can make and their loan will also be paid. Some lenders do not want to modify. If you can demonstrate to them that you will be able to pay the past due business loan by getting a lower payment, they may agree to it.
Provide documentation to support your request
Prepare a Quarterly or Monthly Profit & Loss statement to show the lender that you cannot pay now, however if they lower it, your budget will allow for their payment.
4. Take another hard look at all of your current expenses.
Can you easily reduce expenses somewhere else? Are there services that you are paying for that you really do not need and can cut? This can include business expenses and personal expenses.
FAQ’s – Frequently asked questions and comments
Question: I am behind on a merchant cash advance. How can I get out of it and get help?
Answer: There are other options you can consider to consider to clear out and settle your advances. It is not too late. Talk to the lender about every possible solution. Show you are proactive and that you do not want them to file a certificate of judgement.
Question: Will a missed payment on a cash advance hurt my credit?
Answer: One or two missed payments should not hurt your credit any or very little. It should not have any affect on your personal credit.
Question: Will my business credit be hurt if I miss a payment on my business loan or my mca cash advance?
Answer: Your business credit should also not be affected if you miss a business loan payment or cash advance payment by a few days. However, your credit with the lender itself may be affected. If your business loan goes too far past due or you have too many missed payments then you may have trouble getting another business funding from that same lender in the future.
Accounts receivables financing
Accounts receivables financing is another way to increase the cash flow you need to pay your current past due merchant cash advance or business loan. This can give you cash now which may be enough to pay the payments you missed and are behind on.
Consider an asset based loan
This includes a loan against equipment. Funding is between 24 and 42 months and includes a monthly payment. Earth moving equipment, Yellow Iron and “over the road” OTR rigs, semi-trucks are usually accepted.