Category: Articles

How to Get an MCA Cash Advance

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Looking for Tips on How to get an MCA Cash Advance? Complete the application above, Call us at 919-771-4177 or
use the Tips below!   Information on how to calculate payments, how to get approved and avoid being declined.   Read Tips on what to do before closing.

 How to get an MCA Cash Advance

Supply: The last 4 months business bank statements

Tool: Desktop, laptop, tablet or phone

Step 1: How much are the Payments?

VIDEO CLIP below: See if your Business can afford a daily, weekly or monthly payment:   18 Seconds –  50 Seconds in Clip below.

Will Sanio, Smallbusinessloansdepot.com. Today’s Video: How to get an MCA Cash Advance.  What could be your first Merchant Cash Advance.

Start the process anytime by tapping apply on the bottom right of this screen, or tapping on the end screen of this video, or the apply button on the webpage.

See if your business can afford a daily, weekly or monthly payment.

First, calculate an estimate of what your new daily Cash Advance Payment will be.

Let’s take an example:
Multiply a $10,000 offer amount times a 1.4 Rate Factor. There are 21 Payment Days most Months.
If your Offer Amount is for 7 Months, that’s 21 times 7 = 147 Payment Days.
Take the $14,000 Total Repay and Divide it by 147. That Equals $95.23 Per Payment Day
for Every $10,000.

Step 2: Review your Company’s Cash Flow

VIDEO CLIP below: Review Company Cash Flow:  CLIP:   80 Seconds –  93 Seconds in Clip below.

Look at the Total Deposits of each of your last 3 Months Business Checking Account Statements.

Some States require 4 Months Business checking account statements. Currently California, New York, Florida, Virginia and Utah.

The minimum total deposits into your Business Checking Account should be $5,000 a Month or more. The higher the Deposits, the more options are available. Especially beginning at $10,000 a month.

TIP: Average Daily Balance: That is the average balance per day for the Month.  You want your Average Daily Balance to be at least $750, but better $1000 or higher.

TIP: Overdrafts or NSF’s. You should not have more than 5 to 7 Overdrafts or NSF’s in any 1 Month, or it is more likely you will be declined.

If you have more, it is better to wait until you get your next statement and those are gone.

Step 3: Apply

VIDEO CLIP below: APPLY:  CLIP:   Seconds –  Seconds in Clip below.

Find a Lender that fits your Business type and talk to a Representative before applying. That will help your business avoid unnecessary declines.

Next, Apply. If approved, request the closing docs. Get a Copy of your Driver’s License, Voided Business Check and Proof of Ownership.

Step 4: Close

VIDEO CLIP below: CLOSING:  CLIP:   Seconds –  Seconds in Clip below.

Next, close. Review the Contracts, and if you’re satisfied, complete the contracts and expect funding into your Account in 2 to 4 hours.

If you ever have repayment problems, call the Lender to discuss.

That will help your business keep it’s ability to borrow again in the future.

Complete the application below or Call us at 919-771-4177.

Go to the Video Page: How to get an MCA Advance

Don’t forget to be ready for the business checking account verification.     Ready to apply?   Use the secure application button below.

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For additional help building your business, visit SCORE.org

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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How to Open a Business Checking Account

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Watch Video above. Click or tap arrow to play. Call us at 919-771-4177 with any questions. 

How to Supply: EIN Letter, but not for a Sole Proprietorship using their SSN. Similarly, articles of Incorporation if Incorporating, or a License. Also Money to open checking Account, ID (Identification).

How to Tool: Desktop, laptop, tablet or also phone.

Estimated Cost: Approximately $100 minimum to start a checking account but the amount will depend on the Institution.

Step 1:  Pick a Business Name

Decide on what you will name your Business.

Choose a name that is relevant to your business type and easy to remember. Shorter business names that the public will easily identify can help build brand awareness.

Also decide if you will be 100% Owner or if there will be additional owners.

TIP: Avoid changing your business name in the future.

Step 2: Register Your Business

Go to the Secretary of State for your State. You can use this online tool, Searchsystems.net to Search. Find your State. Choose the company search option and do a name search to see if your chosen business name or similar name is available.

If it is available, decide on a Sole Proprietorship, Partnership, LLC or regular Corporation setup. An LLC is popular with small businesses for the legal protection it provides the owners.

Ask your County or City of they require any separate licenses.

Next, get an EIN number for your business through the IRS. This is needed for all businesses except Sole Proprietors that use their Social Security Number for taxes and tax returns.

Step 3: Gather all Documentation from Business Registration.

Have ready your business name, Articles of Incorporation or Business License, and EIN Letter.

Step 4: Contact Institution and Open the Account.

Go to the Bank to open the Business Account with all of your information: EIN Letter, Articles of Incorporation or Business License, and business name. If the bank is online, begin the process online.

TIP: All owners need to be present and show Identification. Acceptable identification is a valid Driver’s License or State ID Card or a Valid Passport.

Complete setup and enjoy the Account!

Conclusion: How to open a business checking account.

If you follow the steps above, then you can open a checking account for your company with no hassles.

If you have been using a personal checking account to run your business, then begin depositing funds into your new company checking account immediately.

Finally, you can use the cash flow in your new checking account to obtain services in the name of the business, such as bank statement loans, credit, credit card processing and other services.

To get a business loan, business credit or simple credit card processing for your business complete the contact form below.

This Article covers how to open a business checking account. Documents needed such as Tax ID number and getting a Secretary of State Listing is included.

To obtain needed services such as bank statement loans, asset based financing, or learn other self help for business issues including videos here. Watch just the Video Page here.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Loan Against A Trailer

Get a loan on a Trailer, now.   Do you own it outright ?   Then get money against the Trailer, fast. Even more, very low credit scores will work.

Watch: Video above. See trailers in action!  Click or tap arrow to play. Apply below now or call 919-771-4177.

Apply below now or call 919-771-4177.  

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Data Secure 30 Second Application here.

So which Trailers Qualify to get a loan on a trailer?

Aluminum
ATV
Cargo
Custom
Dump
Enclosed and Open Car
Equipment
Gooseneck
Flat bed
Heavy Duty
Landscape Utility Trailers
LivestockTilt
Low Boy
Low Profile
Motorcycle
Refrigerated
Semi-Trailer
Tandem axel deckover and Dual Deck
Used Trailers
Utility
Racing
Vending
AND MORE!

Which Manufacturers? American Hauler, ATC, Big Tex, B Wise, Bri-Mar, CAM Superline, Car Mate, Cargo Pro, Carry On, Covered Wagon, Diamond Cargo, Homesteader, Master Tow,  Premiere, Sno Pro, Sport Haven,  US Cargo and more.

Bad credit and low scores down to 500 may still qualify.

So do I qualify? Do you own your Trailer outright and have a free and clear title ?  Then you pre-qualify.

You don’t own it outright?   Ask for our straight cash only program.   Even when you still owe on your trailer! However, do you also have other equipment?

Additionally, get more working capital with a loan against equipment.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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You complied  with the rules.  Now you have been told you did not meet the conditions and your PPP loan was not forgiven.

Consider 4 ways below to deal with this along with other funding options if needed. Apply Below Now for Alternative Funding Solutions such as bank statement loans!

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Call 919-771-4177 for more info.

How to Deal a Repayment Demand when your PPP loan was not forgiven:

1. First Look For Mistakes.

The government and large bureaucratic processes often make mistakes.  Look through all of the guidelines and rules.   Try to pinpoint how they came to their decision, and if it was correct.

Read their own official rules in detail since analysts make mistakes.   But don’t just claim a mistake.   Find their mistake, detail it, and also state why it does not apply to your case.

2. Appeal the Decision. 

Appeal the decision regardless of whether you find a mistake or not.   This also applies even when you are not likely to win.     Many times  having another representative review your case results in a different decision.

Find out the details of the appeals process and follow it precisely.   Also followup during the process to make sure all your borrower rights are being met per legal requirements.    Backed up government processors often cannot meet certain time requirements.   Failure on their part may be a basis for a reversal in the decision.

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Basis for Appealing an unforgiven PPP loan 

Minor violation

Lack of proper documentation is the easiest problem to fix.  Provide the proper payroll expenses, rent roll, utility and other statements. Submit any missing information as part of the appeal.

Incorrect Decision

Funds not used as intended is a common denial reason.   As mentioned above, look for errors in their process.   People do not find mistakes when they do not look, so review their response in detail.

Look for mistakes in the rational for why your ppp loan was not forgiven and then attack denials that are weak.

Did not fully understand

This basis for appeal is not a strong reason. However, it may be enough to a reversal of the decision in some cases.

3. Gather All Documentation to Support your Appeal.

Documentation is key, so gather and review all you information.   Take a second look at your PPP expenses such as Payroll, Rent and Utilities.

Appeal Denied

Confirm whether appeals that are denied can also be appealed.  Ask for time to respond to any denial in writing and also request an in person hearing.

Settlements

Make a formal counter offer in writing for a settlement and also document why your business cannot pay a forgivable debt. Provide cash flow statements such as tax returns, bank statements, Profit and Loss statements and Balance Sheet supporting your argument.

4. Find other Funding Alternatives

Look for alternative funding options to shore up cash flow shortfalls from unforgiven PPP business loans.

A business’ cash flow is impacted because they did not expect to have to repay a forgivable loan.   Many other small business loans can be a good fit.

Asset based loans are also a great choice to assist with cash flow until the business adjusts to the partial repayment of their ppp loan.

FAQ:  Why did they not forgive my ppp loan? 

Why was my PPP loan not forgiven?

PPP loan forgiveness is not granted when you do not meet the usage conditions of the ppp loan stated in the contract.     The most common reasons are incorrect use of funds and time deadlines for usage.

What can I do about it? 

Carefully review the reason for the decline.  Read the rules for ppp funds use and check for mistakes in the decision.   Sometimes decisions are flawed or not clear cut.

How can I get the decision reversed? 

Appeal the decision.   Prepare all the documentation needed and submit a formal appeal.

Conclusion

A decline of forgiveness for your PPP loan may be a shock.  Take action to challenge the decision that may lead to at least a partial reversal.

Since these loans can be for large amounts, it is worth the time to see if you can change the outcome.     Look for mistakes in the process, prepare your paperwork and request an appeal.

How to Reverse a Business Loan Decline

There are several ways to reverse a business loan decline into an approval fast.  A lot depends on the reasons.   Some can be handled in days and you can change a denial into an approval with these easy fixes.

Apply below now for programs such as bank statement loans that specialize in dealing with common decline reasons.

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Reverse a Business Loan Decline: 7 common denial reasons

• • Derogatory Credit 
  • Debt to Income Ratio too high, or cannot afford new payment 
  • Insufficient Cash Flow 
  • Too many recent inquiries
  • Ownership percentage not enough
  • Unacceptable or no Financial Statements and Tax Returns
  • Recent overdrafts or low bank balances

Turn these Denials into Approvals now

1. Derogatory Credit .

Bureau scores that are too low are among the most common declines.   Many people believe it takes years to improve their file and that they have to pay a credit repair agency to fix their negative reportings.

Incorrectly Reported Bureau Information:

Many times, information reported by the consumer reporting agency is incorrect.    Review your report and look for inaccuracies.   You can often get corrections and deletions updated within weeks.   Once you have identified the incorrect trade line reports, you can dispute it yourself with the reporting agencies, or hire a credit repair agency.

You will have already done much of the work just by reviewing your file in detail.    Doing the rest yourself lets you follow up faster and dispute it again if the reporting agency puts the same slow pay items back on your file.

Outdated Bureau Information

Sometimes outdated information hurts your scores.   An old account may still be showing on your report that has been paid.   A balance on a current account can be much higher on the bureau than the true balance.    Some creditors do not report every month. Disputing or updating outdated trade lines in your file can often increase your bureau scores.   Tell investors when you really owe less than what the bureau shows.   That improves your ability to pay new debt.

Scores Too Low:

Often, your current scores are too low.   Taking the actions above should increase your score because fewer derogatory and outdated items will be on your file.    Your bureau scores will jump quickly and may trigger a reverse of a loan decline.   Other funders may approve your company with higher scores as well.

2. Debt to Income ratio too high or cannot afford new payment.

Debt to income ratio is the percentage of fixed monthly debt divided by monthly gross income.    This is often calculated as part of the credit review process.

For example:   A borrower has monthly income of $5,000 and fixed obligations of $2,000.  Their d/i ratio is $2,000 % $5,000 = 40%.

If a borrower’s percentage is too high, they may be rejected.  Businesses with higher gross sales than others are likely to have more discretionary income with the exact same debt ratio.    If you can afford the payment, then document your cash flow.   Contact the lender and show them your company’s disposable income figures.  Prove that you can make the payment and ask to appeal the denial.

3. Insufficient Cash Flow 

Lenders may look at your overall cash flow.    Many require a minimum amount of annual company sales to even be considered for financing.  Many calculate the maximum loan or mca as a percent of your monthly revenue.

Funding sources that reject for this reason often do so in part on the most recent tax return figures.    Your most recent business tax return is already dated.   Provide a year to date YTD Profit & Loss statement and Balance Sheet when the current year is stronger than the previous one.   Doing so may justify approving a request that originally did not pass the approval process.

If your current year is about the same as the previous, then you would need to figure out other debt or income information that could potentially reverse the denial.   For example, large new customers that are new will increase revenues substantially.

4. Too many recent inquiries. 

Denials from inquiries can happen if the owner(s) have recently been making purchases that require financing, or new services that require a credit check.  Lenders have become more savvy at assessing these, but their automated reviews are not perfect and may not account for inquiries that should not be counted.

Many financing programs use a soft pull instead of a hard pull.   However,  some programs use a soft pull initially to make an offer but still do a hard pull later before closing.

If a lot of your inquiries are from shopping for consumer goods, or related to living expenses such as utilities, then document these.   Contact the funding source and show them what the inquires were for, and they may re-consider their original decision.

5. Ownership percentage not enough. 

Applicants must have at least 80% or higher ownership in the company to be able to close most financing on their own.   Many lenders require a higher  percentage such as 95%, and often full 100% ownership.

Discuss this with the other owners.    100% ownership is required for most financing so they may be required to sign.   Your enterprise will eliminate itself from good options if one owner with less than 100% ownership wants to get funding on their own.

There are exceptions for owners with very strong credit and assets. Owners with bureaus over 700  and a strong personal financial statement may be offer a guarantee by themselves with less than 100% ownership.  However, many investors will not consider any request with less than 100% of the owners applying, no matter how strong any one owner is.

6. Unacceptable or No Financial Statements or Tax Returns.

Some financing requires financial statements that the applicant does not have and is rejected as a result.    This usually includes the most recent 2 to 3 years personal and business tax returns, current interim financial statements and bank statement payback months for the same repayment months the new financing will be for.

Gather and provide the missing items and request your application to be reconsidered.

In other cases, financial statements were not acceptable.   This normally means the gross or net  income was not high enough, or not enough the cover the new payment.  A decline may result from just having one lower sales year out of the last three.    They want to see steady or increasing business revenues annually or they will not approve the request.

Alternative Options: Look for other programs if this is required.

7. Recent Low Bank Balances or Overdrafts. 

Even with a strong company and personal profile, recent low bank balances or overdrafts may be a source of rejection.

Your may need the cash because of a recent slow sales.  Many lenders are not forgiving to recent slow cash flow and overdrafts.  Applicants believe recent low sales is why they should be approved for funding.   Funding sources believe low sales in the last quarter is why a borrower wont’ be able to pay and therefore don’t make the offer.

Alternative Option:   Look for another lending program, or wait 30 to 60 days for your cash flow to rebound some, then apply.     If you can wait, first ask if it will make a difference.   Consider other sources when your request will not be reviewed again later.

Discuss your recent cash flow or overdraft issues in depth with the lender that rejected your business.  They will tell you they will reconsider it, but are very unlikely to change their original decision to an approval.   Many investors must consider all requests, whenever made.   Talk to them about fixes to previous issues before re-applying.

FAQ: Frequently asked Questions on how to reverse a business loan decline fast:

How can a decline be reversed?
The reasons can very often be quickly corrected or improved by making relatively easy updates or changes, such as ownership percentage.  Ask the lender if the changes you make may cause them to change their decision before you re-apply.

Can the decision be overturned into an approval fast?

Many changes can be made within days that allow a lender to reconsider the request.   Other changes will take longer but may still be accomplished within 30 or 60 days.

What if I can’t wait?

If you do not have the time to make corrections, then the best approach is to consider another type of funding that will not give you the same negative result.    Talk to other lenders in advance before applying.

Conclusion: Change a business loan decline into an approval

Do not believe that nothing can be done after your business does not get an offer.   Reverse a business loan decline into an approval today.  Having documentation, a strong rationale and persistence are key to turning a no into a yes.

Sometimes the wait may be weeks, but the result can be reversed in the end.

You will understanding what can be corrected and this is information to use in your favor to get the funding needed!

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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What is Loan to Value?

Loan to Value is the maximum percent of the value of an asset a lender will loan against. It is usually based on the retail sale value, but not always. Sometimes it is based on the Auction or Liquidation value.

For Example, if an asset, such as a house or piece of Equipment is worth $200,000 in the marketplace and the lender will loan a maximum of 75% Loan to Value, also known as LTV, then the maximum loan amount the lender will give is $150,000. This is because $200,000 X .75 = $150,000. better terms.

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Consider 7  ways, detailed further below to maximize your borrowing strength.

1. Understand Loan To Value, also called LTV. 
2. How to use the equity in your assets.
3. Negotiate.
4. Know the risk of loss.
5. Get the highest % funding against collateral.
6. How does credit affect the percentage?
7. How can an appraisal help?

7  ways to use loan to value to help get the money you want.

1. Loan to value: How it works:

LTV is the amount a lender offers as a percent of the value of any asset they take as collateral.

Example #1:

Your business applies for capital.   The lender wants collateral as security and tells you real estate is required.   Because you need a large business loan, you agree and pledge residential real estate.

Your home is worth $300,000.   The lender has a maximum LTV policy of 75% against real estate.

In this example, the maximum amount would be $300,000 X .75%
= $225,000.    If your home is free and clear and the lender agrees to a 75% LTV, then expect $225,000.

Example # 2

Instead of real estate, you put up equipment or vehicles.   The amount offered will be much lower.    35% to 60% is the most common range, depending on the lender and only based on the equipment they choose to accept.   Lenders rarely are interested in all of the equipment available but may take a blanket lien anyway.

You provided an equipment list with $100,000 in equipment.   The maximum Loan to value, LTV is $30% but you are only getting $15,000.    What happened?   The lender likely only is interested in $50,000 of the $100,000 in equipment.   As a result  $50,000 X .30% = $15,000.

2. Use valued assets to boost your Approval amount. 

Example # 1:

A business loan applicant qualifies for $25,000 in business bank statement loans,  but they really need $75,000.    The borrower pledges their vehicles and construction equipment to try to get more.

The retail value on the equipment is $150,000 and the lender comes back with a 40% LTV.   This equals $60,000 combined with the $25,000 the unsecured option.    Combining the two, the lender is agreeing to a maximum of $85,000.    By using the 40% loan to value against the equipment, the borrower is able to boost the offer by $60,000.

Knowing this, applicants can estimate what lenders will do in advance for the collateral they have.    The borrower can use that information to decide if they should apply for an unsecured line, or secured with assets.

3. Negotiate

Almost all borrowers think they cannot negotiate and do not have any power when it comes to the borrowing process.    The borrower does not have the upper hand, but they can get a lot by taking the right steps at the right time.

Negotiate during the request.    Even if they decline what you are negotiating for,  you may still get other improved terms if you had only asked for them.

Ask for higher amounts,  longer terms, better rates and early payoff terms.  The lenders is not going to give you better terms unless you ask for them.

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4. Risk – You can lose your valued assets! 

First decide if it is worth it to use your assets to get money?

If you must have more money, then you must use your assets.    Strong cash flow and credit are the best ways to get an unsecured business or personal loan instead.

The borrower has to decide if the risk they go past due is high and whether they can afford to lose the collateral.    The risk is high when the borrower cannot run the business without the equipment.

5. How to get the highest % Loan  against the value of assets.

Listed stocks, certificate of deposits and any other liquid security usually brings the highest loan amount.   This can be up to 100% because while the balance owed goes down, the value of this collateral does not.  Listed stocks is an exception that can decrease in value.

Real Estate also brings a high loan amount as a percent of it’s market value.  Most real estate backed transactions are in the 65% to 85% of the market value.

After real estate, percentages drop down a lot.   Equipment usually brings between 35% and 50%.   Traditional banks rarely makes these types of deals and usually only offer 10% to 15%.

6. How credit affects LTV Loan to value

Credit scores have a strong impact.    The same applicant with a 700 credit score may get a higher approval than a 575 credit score with the exact same profile.

Lenders will approve more on secured transactions for borrowers with a higher credit score.     Lower credit scores are always considered a higher risk and the numbers go down.

Example:

An applicant with a 725 bureau score uses their free and clear commercial property to get financing.   The property is worth $1,000,000.    They go to a bank that approves a maximum 75% loan to value against real estate.

This applicant that has a 725 credit score gets funding with a 75% LTV, which equals $750,000.

An applicant with a 600 credit score gets a 60% LTV maximum, which equals $600,000.    This is common in practice.   In this case, an applicant can get $125,000 more or less, depending on their credit score.

7. Valuations:   How appraisals fit in 

Many asset based loan offers use valuation tables and market estimates to arrive at the amount.

Provide any recent appraisals you have that are less than  6 months old.  Doing so should protect you from getting low balled.

Consider ordering an appraisal when you get an approval you think is too far below market value.     Lenders tend to make conservative estimates that help them, not you.

FAQ on Loan to Value.

What is Loan to Value? 

The amount a lender will offer as a percentage of the market value of  assets.  Collateral valued at $100,000 with a 60% loan to value may result in an offer of up to $60,000.   

How can loan to value help me?

It helps borrowers decide whether to apply for secured or unsecured financing.  It also helps them understand what types of collateral give the lender.    The biggest benefit is that is brings larger approvals.

What can I do to get a higher offer?

Call the lender and ask what types of collateral they will accept and what percentage they will loan against it.     Real Estate will bring the highest amounts.

Why is the lender approving such a low amount compared to the value of my asset?

It is usually because they only offer a maximum percent of the value depending on the type.  They want to get their money in case of a default by approving far less than the market value.

Conclusion

Negotiating after you have been approved may get you some concessions in terms from the lender.     Ask for a higher amount when you know the offer is too low compared to the market value.

Understanding what loan to value is and how to use it can help you get approvals for higher amounts and terms more favorable to you!

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

Follow me and our Videos below!

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How to Pass a Bank Verification for a Business Loan:

You need to complete a bank verification such as DecisionLogic to close a business loan.  Your balance may be low or overdrawn.

Don’t fail your bank checking account verification requirement.

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What is Bank Verification, also known as DecisionLogic?  Bank verification reviews your recent business cash flow to make sure your deposits are not too low and your business can handle the new business loan payment.  To review the
video mode only page, go to pass decisionlogic bank verification.

Call 919-771-4177 for more info.

STEP 1: Review Total Monthly Deposits:

VIDEO CLIP below: Total Deposits: How much is enough?:  23 Seconds –
38 Seconds in Clip below.

Don’t get declined for failing a bank account verification or Decisionlogic to get a business loan or a Cash Advance. Total Deposits.  Look at the total deposits into your business checking account for the current month.

You want the dollar amount to be on track for the current month or not more than about 25% less than the average for the last 4 months. If it’s much more than that your offer may be reduced or declined.

STEP 2: Check the Minimum Balance Required

VIDEO CLIP below: Minimum Balance:  39 Seconds –
79 Seconds in Clip below.

TIP:  Know the minimum amount you need to have in your account at the time of the bank verification or decision logic. Often it’s a multiple of the payment, either daily, weekly, bi-weekly Or monthly.

Example: If your payment is $90 per day 5 days a week, then the minimum you should have in your account is about $270 for a cash advance and many other business loans.

If the payment is $500 per week, then you should have at least $500 in the
business account but better $1,000 or more. If the payment is $1,000 a month, then you should have at least $1,000 but
Better $2,000 or more in the account.

TIP:  If you do not have the minimum amount needed to close, it is better to wait few days or longer until you do, or you may be declined right before closing.

Overdrawn: 
VIDEO CLIP below: Overdrawn: Is Approval Dead?:  80 Seconds –
103 Seconds in Clip below.

Review recent overdrafts for the last 4 months in your account. Your account should not be overdrawn at the time you do the bank account verification or Decisionlogic, your business will be declined if you are.

TIP:  If you are overdrawn, you must wait until the account has a positive balance. If you’ve recently been overdrawn more than 2 or 3 days in a row, the lender may decline for that reason.

TIP:  If your business account was overdrawn a total of 5 days or
More per month during each of the last 4 months, that may trigger a decline.

Step 3: Review NSF’s for the last 4 months in your account.

VIDEO CLIP below: NSF’s: Insufficient Funds:  104 Seconds –
131 Seconds in Clip below.

TIP:  NSF’s: Also known as insufficient funds are charges that were rejected by your bank or debits that were paid but overdrew the account.

TIP: The bank account verification looks at the NSF’s since the beginning of the month.   You should not have more than about 5 or 6 average per month NSF’s during the current month.

In summary, the lender will look at your current balance, and for the month to date since the beginning of the month, your total deposits, NSF’s and overdrafts and make a pass or fail decision.

STEP 4: Complete

VIDEO CLIP below: Complete: Pass or Fail Bank Account Verification for Loan:  132 Seconds –
171 Seconds in Clip below.

TIP: If you pass, this is often the last step. In some cases, final verifications of the business and owners are completed. If it is the last step, you will be funded.

If you fail the bank account verification, try to find out from the lender what the problem was. You may be able to fix it in a few days such as low current balance or too many overdrafts or NSF’s in the current month.  The lender may be able to fund you after a week or two of good balances and cash flow.

If your cash flow had more problems, the lender may tell you to wait longer and do the bank account verification after that. Work closely with the lender to find out how long that is. For more details tap on the end screen or go to smallbusinesssloansdepot.com.

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DecisonLogic is a company that many lenders use to verify a bank account and it’s activity.   They review the current month to date , recent negative days or overdrafts, the current and average balance, and is a main reason an MCA is declined. If you have recently opened a new business checking let the lender know.   

Review

1. 3 Times the Loan Payment.

The current balance must be positive. An overdrawn will result in an immediate decline.

Do not move forward with the review with less than twice the new payment in your account.  For more info on how to successfully get a loan of this type, you can watch the How to get a Bank Statement Loan Video.

For Example:

If the new payment is $400, then you should try to have $800 to $1,200 available to help insure you will pass a Decisionlogic verification.  Don’t have a low balance the day of the balance check.

2. Few or No Negative Days.

The most recent week should have no negative days.

Don’t worry too much.  A negative balance day will not automatically decline you.   If you had more than one overdrawn day, the risk of a reversal of the approval increases. You want a maximum of 5 total negatives in any of the last 3 months bank statements to get funding.

3. Strong Average Balances

The current month’s average daily balances should be strong.  The  amount depends a lot on your overall business sales and any new debt.   Do keep an average daily balance of at least $1,000 if possible.   Pay close attention to this if your business has had recent low sales.

Businesses with higher annual revenues must have higher average balances in their checking account.

Lenders look at this number to help them decide if the business will have the cash flow to handle expenses and all required payments.   Strong average balances will help you successfully pass a decisionlogic review.

4. No New Loans

Your business should not have taken out any new loans during the last 30 days. The lender can see any new debt through the end of the previous month, but not the current month.

Did you take out a new loan in the current month?   New loans taken out since the beginning of the month trigger a re-review.

Call 919-771-4177 for more info.

FAQ: How to pass a DecisionLogic Bank Verification Check:

What is a Decisionlogic check?

The lender securely reviews the current and most recent cash flow in your business checking account. They use that information as part of their final closing items to decide if the loan will close and fund.

What can I do after failing DecisionLogic?

Talk to the lender. Try to find out as much as you can about why you did not pass the account verification review. Also ask if you can wait a few days and try DecisionLogic again. Some declines are based on low balances and very recent NSF’s.
New deposits coming in during the week along with a clean account can change a decline back into an approval.

How do I pass a DecisionLogic check?

The lender may not tell you but find out as much information as you can. Tell them your current and recent balances are and ask if that will be good enough to pass and close the loan.

Conclusion

Ask the lender what they are looking for before the bank verification check.

What if I failed the verification check?  Ask if you can try it again after you make substantial deposits or overcome the obstacles that caused the verification to fail. These 2 main ways should allow you to overcome the verification hurdle and get funding!

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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The Bank has called your Loan due now

What can you do? Has the bank called your loan due immediately?  It is a very stressful scenario.

You may have received a letter or call demanding that you payoff your business or personal loan immediately.  Very few businesses can afford to satisfy a debt from one day to the next.

Consider the top 3 ways further below to fix the problem, avoid a quick default, and save your collateral.

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Call 919-771-4177 for more info.

Apply above to: Payoff or Refinance your company debt now – before it is in default.

Payoff the Full Balance
Refinance and Extend the term
Negotiate to Restructure or Settle

Bank delinquency rates have gone up in the 1st Quarter of 2020. You can review the Federal Reserve’s Charge-Off and Delinquency Rates report on loans and leases at commercial institutions below.

Quarterly financials, credit score checks and other reviews are often requested.

If your overall situation has deteriorated, you may be at a high risk of a traditional financial institution calling your loan payable immediately.

Familiarize yourself with your best options beforehand.

The Bank has called your loan due and payable, immediately

3 ways to work it out

1. Attempt to renegotiate the contract:

Call and ask for extra time to respond to them.  When ready, ask if they will restructure the existing debt and extend the terms.

Calculate in advance the highest payment you can afford and ask if they can extend the contact to match that.  Provide data and documentation to support your request. This can include recent bank statements,  a current budget such as a profit & loss statement, or tax returns.

Show your calculations for the maximum payments you can make. Provide your supporting documentation and make your request.  Ethical lenders will arrange a workout to avoid a quick payoff demand you cannot meet.

Negotiation Example:Your monthly payment is $800 and you have 30 more to make.  The balance is $24,000.   After looking at your current and future cash flow, you calculate that you can afford $500 per installment.  Ask if you can extend the term of that contract from 30 to 48 and counter that you can manage  $500 per month. If they will not agree, contact or apply with us for payoff or refinance options.

2. Payoff the Loan

Paying off the loan is usually the best option but the hardest to do within days.   Borrowers that have this option available sometimes do not choose a payout.

Many do not want to sacrifice their hard earned assets and liquidity to payoff a debt that is already in default.   At that point, some borrowers would rather negotiate a settlement or protect their assets through a bankruptcy filing.

Primary real estate held as collateral will make the borrower want to avoid a default, if they can. When the borrowers home, stocks or other valuable collateral is at stake, then borrowers strongly consider a payoff using other resources. This avoids a larger loss through total forfeiture of their collateral.

3. Refinance the Debt

Paying off the existing balance is also the hardest way. A refinance can often be approved by using a longer term asset based program to refinance.  Borrowers that qualify for 24 months or longer improve their cash flow up to 75% or more every month. They also may get a weekly or monthly payment.

For Example:The original amount of $50,000 has been delinquent. The current balance is $15,000 and the bank has called the loan due.  Regular payments are $1,500 per month. You have 10 installments left but cannot make them. It will take your business at least 90 days for sales to get close to normal, but the lender won’t give you the extra time to recover.

If you can refinance the contract with a 24 month asset based loan, then your monthly amount due is $625 per month.  You have reduced and improved your cash flow by 140%.   A refinance can be very successful in this type of situation.

Warning Signs

With the nation’s top economists forecasting that the economy will contract 6% overall in 2020 including a sharp 2nd Quarter decline, bank delinquency rates have increased. The chances are higher for personal and business loans to be called by lending institutions to protect their portfolios.

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Data Secure 15 Second Request Form Here.

Call 919-771-4177 for more info.

FAQ Bank called loan due.

Can the bank call my loan due?

Many banks have provisions or covenants in their contracts that allow them to call the loan anytime and for any reason. Most borrowers are not aware of this.

What should I do if I get a payoff demand letter?

Always negotiate professionally and in good faith regardless of the situation. If you end up in court this can help your case. Make a documented case for why you cannot pay. Offer to renegotiate or settle the debt if you are able to. Use any professional legal assistance available.

What can I do if the bank wont negotiate or settle?

Pay the loan off or refinance if you can. If you cannot, then get legal representation to represent you and continue to negotiate. Often the lender will make a final offer before a court case. Arbitration written into the contract may call for a different strategy.

Why won’t the bank negotiate with me?

Willingness to negotiate varies from one institution to another. Large lenders may be less willing to negotiate because it is often a very bureaucratic process. A decision to declare a default is harder to solve after a default status.

Conclusion

If the bank has not called your loan yet, take action as soon as possible. A decision to move towards a default status has already been made when your loan has been called.

Each lender has different levels of flexibility in how they will handle the process going forward. Your responses can influence their actions and final outcome.

Do not assume that your collateral will be taken and you cannot do anything about it. If the bank believes you have a viable plan to repay or reach a workable settlement, then you may be able to get them to settle or restructure the debt.

You must, however, provide a viable, realistic plan and documentation of how you can get back on track quickly. If you cannot, then planning now on how to handle a possible default status may be your best option.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank in Atlanta, GA. Specializing in Traditional and Alternative lending.

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Three times the Daily Payment

What does that Mean? The lender says you need two to three times the daily payment to close a business loan such as a bank statement loan, cash advance or loan against on equipment.

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What is three times the daily payment?

Your business needs three times the daily payment.  A once per day payment of $150 requires $450 to be in the business account at closing.  How do you close this loan when you do not have the funds?  Our funding experts will guide you through the process.

Complete the application below or contact us.   Our hands-on representatives will get your business through this problem, avoid a decline, and get funding now.

Example of needing three times the daily payment to get funding

Road Runner Roofing receives a $50,000 merchant cash advance offer.  The payment is $200 per day.  Just before closing, the advance company does a standard bank account verification check.  One of the items reviewed is the current balance, and Road Runner roofing has $400 on deposit.   The cash advance company declines the loan.  They have $200 less than the $600 the lender wants.  What should they do?  Contact us now at Tel: 919-771-4177

So what else is the lender is looking for?   The lender looks at excessive recent overdrafts, low balances,  and low average balances.  Recent negative balances lasting more than a day or two are also a problem.  Take another look at these other cash flow trouble spots.  They can bring funding to a stop immediately and permanently.

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Data Secure 15 Second Request Form Here.

Call 919-771-4177 for more info.

FAQ: Frequently asked Questions:

Question: What is three times the daily payment?

Answer: Three times the daily payment refers to a frequency requirement for closing an mca merchant cash advance. Take the payment your business has to pay and multiply it times 3. A once per business day payment of $250 would require a balance of $750 at closing to avoid a decline for not enough money in the business account to cover the payments.

Question: Will we be declined for having less money in the account at closing than what is required?

Answer: Your business may still be funded, but the account balance is compared to the amount the lender wants to see. Your current and recent balances, average daily balances, overdrafts and nsf’s will also be reviewed.

Question: I don’t have the required closing amount in the business account for a cash advance now. What should I do?

Answer: Wait until you can make a deposit to meet the amount required for the mca cash advance company to fund. If that will take too long, then call the lender and tell them how much you have on deposit now. Ask them if that is enough before the closing department does the account verification. Transferring money from another account is an option.

In conclusion:

You should be aware of the importance of how much money is in your business checking account while applying for a business loan.

As discussed, if your balances are too low, your business may get declined at the last minute, just before closing. Once you are declined, it is difficult to have the decline decision reversed. Make sure you know what account balances the lenders want to see!

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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What is a concurrent business loan?

A concurrent loan is when your business continues to get more money while you pay down the original business loan.

Get new funding soon after you start paying down your new loan.   Your business is likely to qualify for new funding several times during the same loan through concurrent funding.

Apply below and say you want concurrent funding options.  Read more if a larger business loan is needed.

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FAQ Frequently asked questions on a concurrent loan for businesses

What is a concurrent loan?

A concurrent loan is when the same lender makes another separate loan to a business before their existing loan is paid off. A concurrent loan can be as soon as 1 month after funding. A majority of lenders do not issue more funding shortly after an initial business loan is made.

Why get a concurrent loan instead of redoing the same loan for more money?

Lenders do not want to refinance the existing loan after only a month or two. The numbers in the contract would be wrong. As a result, it is easier to do another stand alone business loans separately. This is especially true if the lenders want to extend more funds often, such as monthly.

Won’t my existing lender give me less money because I already owe them?

The lender will give your business less if you still owe on the first loan. If you have a good payment history, they usually give you more than other lenders because you have a proven record with them. If you need more than they will give, then you can consider other lenders.

How can I get a concurrent loan?

Find out the balance on your current loan and requirements for getting more money.  Some contracts allow you to get more business funding after paying on your loan for just 1 month.  Many other contracts require your business to have paid the loan down 40% to 50% or more.

Conclusion

By knowing what your contract says, you know whether you may be eligible for concurrent funding.

Contact the lender if you are not sure and ask them how they handle a request for more money while your current loan still has a balance.  First check that your payments have been on time. You may find this the easiest business loan you have ever asked for!

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Why Banks don’t Lend to Small Business

Small businesses cannot get loans from banks. There are several reasons. The top 3 further below.

Choose from excellent alternative programs here to get approved for funds.
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1. They charge rates too low to take almost any losses

The lowest rates for business loans are at banks, savings and loans, credit unions and the sba.  Because rates are low, they make much less interest income.    What can you do about it?   Get working capital that a traditional source will NOT approve.   Review more small business loan options here.

2. Federally regulated

Traditional institutions are also heavily regulated. Through state commissions, the federal reserve and fdic, the level of risk in their lending programs is often reviewed and restricted.  They put depositor funds at risk if they make loans that are too risky, especially larger commercial debt. If those loans default it could compromise the financial stability of the institution and depositor funds.

3. They are much more risk adverse

They are risk adverse because of their low rates.  By earning less on each loan, these lenders have to have more loans paid as agreed to make up for even one default.   Traditional lenders are also adverse to many other risks, including economic cycles, natural disasters, health pandemics or outbreaks, stock market fluctuations and many more.  As a result, there is a long list of why banks don’t approve and close business loans.

What are other reasons banks do not lend to small companies? Borrowers have to have strong credit, financial statements and good collateral to even be considered. 

Company owners who do not have a high credit score, strong collateral,  strong financial statements or tax returns and will probably not be approved.   As a result, your business needs a lot more funding options.    Apply above.

For instance, other funding options include a bank statement loan and also a loan on equipment.   Both have fast funding and little paperwork.

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FAQ frequently asked questions:

Why won’t banks lend to small businesses?  Banks, savings and loans and credit unions only accept the lowest risk companies because they offer the lowest rates. Their default rate has to be very low,  so they can only underwrite the lowest risk customers.

What do they need to approve a business loan?

Banks look for excellent credit, collateral and the ability to repay. Cash flow as shown through cash flow statements, financial statements and tax returns verify if the company can repay. The collateral needs to be the type they will accept and they closely look at the intended use of funds.

What are my options after the bank says no?

It depends on your credit, cash flow and collateral. Strong cash flow may qualify you for cash flow funding. If your credit is not good, then your business may need to get asset based funding in which the collateral is the basis for approval.

Will another lender approve us if we have already been declined?

A bank may decline you, but others lenders may offer an approval.  Chances are they reviewed your net income and decided there isn’t enough profit left to make another payment.    Look for lenders that don’t consider net income as closely.

Additional Factors: Why banks don’t warm up to small businesses.

Net income for the new payment
Your most recent tax return or bank statements are used to calculate if your company can handle the new payment. Not all lenders look at this, but some do.

2 to 3 year cash flow history.
Traditional lenders also ask for company financials including tax returns for the most number of years, usually 2 or 3 years.

Industry Type
Banks consider the industry in their commercial loan decisions. They prefer certain industry types over others because some industries are considered risky and restricted.

Time in business
Less than 2 or 3 years time since the official start date will often be a decline reason.  New companies have a very hard time getting approved.   Check on some limited options for a new business of 1+ month time in business.

Existing Loans
If your company has other loans now,  that may be a reason to be denied. This is often called over, or sufficiently obligated.

Lack of financials such as interim financials
Not having the requesting financial statements can be a decline reason.

Not a homeowner.
If you are not a homeowner, some lenders may decline you. Being a renter instead of a homeowner can be a decline reason.   Banks may see renters as less stable and therefore riskier.

Time at current business location
If you have been at your current location for less than 2 years may be denied by many low rate lenders.   Lenders will decline if they feel that stability is lacking.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Business Checking Account Transfers: How they affect your Loan Request

Has your business been declined for a business loan for having non revenue business account transfers?

Certain transfers between business checking accounts are not counted as deposits or true business revenue by many lenders.
Get business funding programs that consider many transfers that are  automatically declined by most lenders.   Click on the application contact form below to get funding started today.   Same day and next day funding available.   Don’t be declined for having transfers between accounts.

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FAQ’s Frequently asked questions on being declined for a business loan for transfers between checking accounts that are not revenue from sales.

Question:   My business has transfers between business accounts each month. Can you still fund a business loan with transfers between accounts?
Answer:   Business revenue transfers will be kept as part of the deposit totals and used to make an offer. Transfers that are not business revenue are deducted from total business deposits for the month.

Question:   Our business was declined for transfers into our business account. Why would the lender decline our business for that?
Answer:   Transfers into an account may not be business income from a customer. The lender believes those deposits did not come from a sale or service provided and are not true business revenue.

Question:  I was denied for a business loan because the loan company did not count transfers between business accounts that were business revenue. Why didn’t they count and include those transfers?
Answer: The most likely reason is that the repayment of the loan usually comes from one business account even when the business has more than one account.

Question: Our business makes transfers between accounts for payroll and other needs. Why are we penalized for that by lenders for a business loan?
Answer: Business revenue transfers will be counted by us towards your total revenue during the loan review. For other lenders you will have to ask them to review their decision. Provide documentation and evidence that those transfers are business revenue. Invoices and deposit detail may help.

Customer examples of businesses that were declined and we were able to get an approval for and funded.

Example 1 :  A construction company had 7 deposits in May into their main business operating account.  During the month they had 5 transfers into that account from the other business account they have.   One of the remaining 2 deposits was for only $200.    The lender only gave the company credit for 1 deposit that month and declined them for not enough deposits due to transfers.
The customer came to us asking if we could help.  The transfers were true business revenue from their other account and we were able to get them approved for  $35,000 funding.   Why were we able to help them?   We looked at the account they transferred funds from and counted those funds as real revenue.   As a result, the fact they transferred funds did not matter.

Example 2:  A manufacturing company had 8 deposits into their account in May.   All 8 of those deposits were showing on their bank statements as
“E-mail money transfer in”.   Three funders declined the business for non business revenue transfers.   The customer told us those were payments from customers and not transfers between his business checking accounts.   The customer does not accept payment by visa or master card and needed to give his customers more payment options than  only being able to pay by check.    Through his bank, his company began offering a very convenient payment via E-mail option after which most of his customers switched to and began using.  The other lenders did not consider this and immediately declined him.

Was your business declined for a business loan due to transfers between accounts?  What can you do now?
Contact the lender to discuss this decline for having business account transfers.

Communicate with the lender and find out which transfers were not counted as revenue.  The decline reason probably did not have enough information.  Ask about the details.   Also ask about the specific policy that does not allow transfers between accounts to be considered business revenue in a loan evaluation .

How can you advocate your business to the lender?
Ask the lender what it will take to get approved.  Also ask if there are any changes you can make immediately that will change the decline to an approval.

When can you apply again?
Ask how long you have to wait before you can apply again.  Most lenders will make you wait at least 30 days before you can reapply.    As mentioned earlier, if you can determine what changes you need to make with your business as well as the type of of deposits,  then make those changes before reapplying.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Missed MCA Payments

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Missing just 1 mca payment should not cause your business problems.   But what if you have more missed mca payments? What can you do to avoid problems?    In this post we will talk about 4 initial steps further below to take if you cannot pay cash advance payments.   Author Biography: Will Sanio

Also consider if you can instead get out of your merchant cash advances now.    Payoffs may be possible through a longer term loan that are asset based.   Also read what to do if you have been declined more funding due to missed mca payments.

If you are not going to be able to get current, here are options to get out of an mca cash advance, or watch the get out of mca video.
Apply below to get started now on safe ways to fix this problem before lenders take action against your business.

What can you do after missed mca payments?

1. Communicate with the lenders immediately.

Contact the cash advance companies right away. Do not think the problem will work itself out or that you will probably catch up in a couple of days. Communication is key. It is better if you contact them before you miss more payments. However, if you already missed a payment then contact the advance companies that day or the next day at the latest.   Maybe the missed payments are not your fault.

2. Tell the cash advance companies what has happened and why.

But how do I explain this to the mca companies?
It depends on your situation. What is your cash flow situation right now?  Can you begin making the payments again right away? Figure out what you can pay, when, and how often.   Let them know what is happening with your business.    If you have a good reason for missing payments, tell them that reason.   If you can back it up with documentation, all the better.    Being proactive and communicating will be your best option at the beginning.  If the lender has no coj confession of judgement, you will still want to work out a payment plan to avoid a default.

3. Can you start making payments again?  If so, make an agreement with the advance companies to begin.

Call the cash advance companies even when you can start  making payments immediately. They still want to know why you missed mca payments.  That will help your case.  You may end up missing another payment later you did not expect to miss.   It is better if you are already on record as being in contact with the lender.

4. Payment plans after delinquent mca payments

Payment plans are best when the business can neither keep making the daily payments or paying off the advance. The cash advance company may be very willing to set up a payment plan. They will be able to get payments in full and the merchant will make the total sum of payments.   It is up to the lender to do this.   If your business wants to go this route then be ready to explain to the cash advance company why a payment plan will work for both of you.

Other Considerations on handling your loan if it is past due

Missing consecutive payments

If you expect to miss more payments consecutively, then you want to decide if you can payoff the advances first. Paying off advances with another loan is better than continuing to miss payments.   You can choose from unsecured options such as bank statement loans and a large business loan if you need a lot.

Bouncing more mca payments.

If you know you cannot sustain your payments then paying off the advance may be the best option.   This is because missed payments will make it much more difficult for your business to borrow in the future and make this your worst option.    Many merchants would rather not take out a new loan.   However, if you are approved for a new loan that can payoff loans you cannot pay, you should strongly consider doing so.   Many businesses cannot even get approved for a payoff and don’t have that choice.

Payoffs

Paying off your merchant cash advances may be the best option.   But when is it better to payoff and when is it better not to?  It is usually better to payoff the cash advances when you know you cannot keep paying the current payments.   Paying the advance off with another loan works very well if you have less than 3 months or so left on the exiting advances. Taking out a loan to payoff a low balance is still much better than missing mca payments and defaulting.    You can avoid damaged credit, court action and trouble getting loans in the future.

When does it make sense to payoff one loan with another?

Example: A merchant has an advance with a daily payment of $100 and has a remaining balance of $3,000.  He has 30 payments left but he cannot keep making those last payments and will go past due and default. Before going past due the merchant is offered another loan for 6 months to payoff the $3,000. The new daily payment will be about $35 per day for 120 days.   The borrower can afford this easily.   Problem solved.   The business now has a payment they can afford and does not have to worry about paying the advance on time.

Extending the term

Extending the term and lowering the payments is usually similar to a payment plan. Sometimes it is more informal and the cash advance company will just let the borrower continue making payments past the term without a formal contract.  At other times a formal new contract will be written that replaces the old contract.    Expect the mca company to charge penalties, fees and more interest as part of the new contract.

Lowering Payments

Getting your mca cash advance company to lower the payments works best when your business just needs short term cash flow relief for a week or two. Your business may just have a brief cash flow problem it needs to work around.   Be aware that mca companies are not receptive to businesses calling in multiple times and asking to lower payments for a while.    It is supposed to be a rare request rather than one of convenience.   Some lenders may only do this once during the term of the contract.     If you think your business will need to ask for lowered payments several times then find a different option.

Pausing payments

A pause for one to three weeks may be all a business needs.  As with lowered payments, your business has to be sure it will be able to restart and continue payments when the payment pause is over.     You should not pause payments if you need a longer term permanent solution.    Sometimes businesses will ask to pausing payments when they know they will have a problem again when the regular payments start back up.   If this is you, then you should put all your efforts into solving the problem permanently on the front end.

Settlements after significant missed mca payments

A settlement directly with the mca cash advance company can be considered when other options will not work.  Settlements usually happen after a merchant has failed with a payment plan or lowered payments and not able to handle regular payments anymore.    It is a step before a default but still considered better than a default situation.
Beware of 3rd party settlement companies that tell you to put a stop payment on a merchant cash advance company.

We believe this is the worst choice in almost all cases.

Many settlement companies will tell you to do this to buy time for them to negotiate with the mca cash advance companies on your behalf.     However, they still want you to pay them a lot of money upfront before they start negotiations for you.    We believe this is a very bad idea for your business for several reasons.

Let’s break down why:

Your advance will be declared in default immediately when you put a stop payment on them.  You certainly will not want to even consider this if you have not read your MCA contract in detail.   The contract will tell you all the actions the advance companies can take when you put a stop payment on their daily Payments.  Putting a stop payment on a merchant cash advance will definitely result in the strongest response against you by the mca companies.   If they have a coj, then they will file it against you almost immediately.    The settlement companies telling you to do this do not have to deal with the problems you will have! Do not do this!

Beware of companies that tell you to close your business checking account

MCA companies will react in about the same way as when you put a stop payment on their daily payment. They usually consider closing your business checking account to stop an mca merchant cash advance as an intentional default.

What is an intentional default?

An intentional default happens when a borrower takes an intentional action not to make good on the contract.  This is almost always combined with little or no communication with the cash advance company. Lenders think of the borrower as trying to evade an obligation and contractual promise to pay. Worse, their contract usually includes specific language that talks about what actions and remedies they can take if the borrower closes their account. We believe this is a bad option for almost all borrowers. Contact us above for much better options!

Defaults

Defaults are the least desirable option.   The lender has declared that they are taking a loss on the loan.   The worst adverse action has already been taken against the merchant, which may include filing a coj confession of judgement. All efforts should be taken to avoid a default on a cash advance.
If the mca company has a coj confession of judgement, they can have it enforced through a court in one or two days.    Sometimes they can have it affirmed by a court the same day.

What can the cash advance company do then?

They can have the sheriff contact any bank they wish and demand that the bank verify if your business has a checking account there.   If so, the cash advance company can debit all the funds out of your account.

In conclusion

The tips above can guide you on how to handle specific situations with cash advance payments. If you continue to struggle with debt long term the National Foundation for Credit Counseling, NFCC can help with budgeting and strategic long term debt planning.

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FAQ Frequently asked questions on missed mca payments.

My business sales were down recently and I cannot pay my daily cash advance payments. What are my options?

Do not stop communicating with your mca merchant cash advance companies. Consider any ongoing relief programs they can offer. Look at asset based alternative programs to payoff your advances in the short and medium term if you have collateral.

I missed an mca payment. What can the merchant cash advance company do?

If you have only missed one or two payments then the mca companies are very unlikely to take action besides trying to contact you. If you have not talked with them yet and you miss more consecutive payments, then contact them asap.

My cash advance company has threatened to take action against me for missing payments. What can I do?

If your mca company has threatened to take legal action against you it means they probably have not done so yet. You still may have a chance for a good result. Look at what you can pay and consider offering to make the maximum payment you can.

If they refuse then put your offer in writing and email it to them certified. This may work strongly in your favor if there is future court action against you. It shows that you communicated with the cash advance companies and tried to work out a solution to fulfill your obligation to them with your worsened financial situation and they refused to work with you. Whatever your outcome ends up being, this action should put you in the best possible position later.

I don’t want to talk to the mca companies. They are very aggressive, rude and threatening. Why should I talk to them?

Talk with them because if you don’t they will take action against you. They may be able to put a freeze on your business checking account or block your account. You will not be able to use your business checking account if they do that. That will be the worst result for you and your business. Contact them to see if you can come up with a solution.

My cash advance company said they can lower or pause the payments. Which one is best?

Pausing the problems is best when your business has a short term cash flow problem for a few weeks and will be able to begin making the full daily payments again after that. Lowering the payments will be best if your business is going to keep having trouble making the regular payments later. If you cannot make the regular mca payments later then it is better to get the payments lowered long term until you have paid off the contract.

I have some delinquent mca payments right now. Should I payoff the mca payments or try to work out a compromise?

Payoff the cash advances if you are able through another loan when you cannot keep making the daily payments and will default. Work out a compromise with the lender when you have the cash flow to make a lower payment. Ask them not to declare you a default account.

Is it good for a settlement company to tell me to close my business checking account so that the mca companies cannot debit my daily payment?.

You should not close your business checking account to stop daily mca debits except in some rare cases. Closing your account automatically causes you to be in default. The mca company can also declare the act of closing your business checking account to stop the daily debit as an intentional default.

I missed some daily mca payments and the advance company is telling me I am in default. Can they declare me in default?

If the contract says missing a certain number of payments puts your account in default and you missed that number of payments then they can declare you in default. Negotiating is usually better even after you have been declared in default on a cash advance. Communicating with the advance company will usually get the best possible outcome for your business.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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What is a Real Estate Merchant cash advance?

A business loan with terms up to 2 years using real estate as collateral structured like an mca is considered a cash advance.  Use your home or property to get much higher approvals. Apply below today!

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Call 919-771-4177 for more info.

• Residential Home or Commercial
• Lower Weekly or Monthly Payments
• Higher Approval Amounts
• Longer terms: 1 year to 2 Years

One of the closing requirements is residential or commercial real estate with enough equity in the property to cover the amount of the loan.  Want a regular advance without Real Estate?   Visit how to get an MCA Cash Advance.

Apply below for fast funding

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Frequently asked questions F.A.Q.: How to get a real estate backed merchant cash advance

Why should I offer my house?

Using Real Estate gets you much higher approval amounts many times. You can also get cash out in addition to paying off advances, and rates are lower.

What are the advantages of using property?

The term is much longer and so the payment is also. Much lower payments help consumers avoid delinquencies, defaults, charge offs and future collection efforts when they are sure they can make the payments. Protecting your credit means your entire credit file, score and history will be preserved for you to use in the future.

What is the approval process?
Provide only the application and basic information on your real estate initially, including any recent appraisal you have. After an offer is made, closing documents are issued. When you have sent in completed docs and closing items, a closing call is made to you. The transaction is funded after the merchant call.

What if I already have advances?
You can still qualify with advances on the books now. The new loan can be more capital and you can payoff all other short term loans. Traditional lenders rarely will approve customers with short term advances. This option allows you to have mca’s now.

Does my home or property have to be free and clear?

The real estate does not have to be owned outright and only needs enough equity for the new loan. You can have a 1st or 2nd mortgage on the property and still qualify if there is enough equity.

Real estate will not be required for other funding options such as a
asset  based loan, and accounts receivables financing.

Businesses commonly use commercial or even real estate to get a larger loan. Programs are available for businesses that need a larger business loan but do not have real estate to use as collateral.

How to get a real estate merchant cash advance:

1. 1. 1. 1. You must have property that has at least 50% equity or more.
         2. Tip: Higher loan requests over $50000 and land with a value over $100000 will work better.
         3. Do a search for lenders that offer business loans or mca merchant cash advances using real estate as collateral. Review the features and benefits and find the program that best matches your situation.

            

         4. Contact the funder. Discuss your request and business profile with a representative. Try to prequalify and find out how likely your business is to meeting approval requirements.

            

         5. If you prequalify consider applying and submit an application and required information. After an approval review the approval terms and conditions.

            

         6. Complete the transaction when satisfied with the terms and closing requirements.  Provide any closing stipulations required.  Complete a merchant closing call and receive funding into your business checking account.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Get a very low credit score business loan.

Business loans with very low credit scores below 500 and as low as 383 are considered.  This low fico program is a good match with bureau’s below 500 considered.

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Data Secure 15 Second Request Form Here.

Call 919-771-4177 for more info.

Many programs do not offer small business loans with the owner’s credit score below 500, or have limited offers.    Get up to $150,000 in funding considered with fico’s under 500 and down to as low as 383.   Approvals is based mostly on company revenue and time in business.

Contact us below or first read the “Howto” section steps, direction and tips to getting low fico credit score commercial loan.  Almost all callers discover they can qualify for some program.

Data Secure 15 Second Request Form Here
Call : 1-919-771-4177

How to get a very low fico credit score business loan

Step 1: Research companies that have low fico credit score business loans as main programs.   Review minimum funding amounts, rates, features and benefits and processing time from application to completion.

Step 2: Tip:  Prepare explanations or documentation for any unfavorable or incomplete information in your company’s profile.   This can be slow revenue periods or not much reporting in the bureau.

Step 3: Choose the program that most fits your repayment history and overall customer profile.

Step 4: Make contact with funding programs and confirm your business meets minimum funding program requirements.   Discuss amounts with the lender representative.

Step 5: Submit an application for funding.  Provide documentation you have that improves your chance for an approval, higher offer amounts and better terms.   This can include financial statements, additional bank statements or tax returns.

Frequently asked Questions FAQ:

Can I get business funding with a really low score?

Yes, your business still has an excellent chance of qualifying with strong cash flow and revenue. Providing the most recent bank statements showing you can make the payment will prequalify you.

Will we get less with bad credit?

Strong sales will still get the same or similar approval amount.

Can I get an offer with charge offs and delinquencies on my credit?

Your company can still get funding with the owner having charge offs or delinquencies. Programs include funding based on the monthly deposits or assets. Assets can be real estate or equipment.

Will my business need collateral with very bad credit?

Collateral is not required for approval with bad repayment history. Many customers qualify for unsecured programs.

Can a good credit co-owner get approved instead of me?

Another owner with higher scores can apply if they have 50% ownership. Strong co-owners with less than 50% ownership should apply under owner 1 and the other owner listed as 2nd owner.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

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Same Day and Next Day Business Loans

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Data Secure 15 Second Request Form Here.

Call 919-771-4177 for more info.

How to get same day business loans and next day business loans.  The following are steps, direction and how to tips.

• • Search online for lenders that specialize in getting a business loan the same day you apply. Consider reviews if available.
  • Read program requirements to determine if you qualify to get a business loan the same day or the next day. Verify they are not payday loans or car title loans.
  • After reviewing, make a list of the top two or three funding programs that best match your business.

• • Contact those funding programs. Verify features, benefits and requirements with a representative. Ask if there are cut off times or deadlines during the day for providing information, documentation, or other stipulations.

• • If your business meets the requirements, consider applying for the program that best aligns with your business.

• • On any offer made to your business, review the terms with a representative. Before closing, verify that you will be funded by the day and time of day your business needs to receive funding into your business account. Confirm that funds will be wired by a certain time and that your bank immediately credits incoming wires into your business account. Complete the transaction and receive funding.

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Data Secure 15 Second Request Form Here.

Call 919-771-4177 for more info.

F.A.Q.:

How fast can we get funds into our business account?

Application to funding can be as fast as three or four hours. Approvals completed by late afternoon can still be funded the same day.

When can I be sure I am getting the loan the same day or next day?

Ask if all of the requirements have been met and if there is anything else that needs to be completed before the funding wire is sent to your business account. Also ask for daily cut off times for funding the same day.

How do I know if I qualify?

Revenue over $5,000 per month and average daily balances over $750 are the most important qualifications. At least three months time in business and roughly 5 deposits per month are also important.

Do I have to send in a lot of paperwork?

Approvals require only a one page online application and the most recent three months bank statements. For asset based programs,
provide an asset list that includes description, year, manufacturer and model number for offers.

What if I get the money too late and don’t need it?

Request to return the funds and cancel the contract if funds are not wired out by an agreed day and time. Ask to have a cancellation agreement clause put into the contract. Right of rescission laws may allow you to return the money and cancel the contract up to 72 hours after closing.

Some examples of same day or next day business loans include merchant cash advances and loans against OTR over the road
tractor trailers and semi-trucks.

We are a leading funding source for all Small Businesses looking for the best alternatives to Banks.

Author Biography: Will Sanio, Owner of SCF Funding, dba SmallBusinessLoansDepot.com, has a Bachelor of Science Degree in Business Administration with a concentration in Finance from the University of Tennessee, Knoxville.

Over 20 Years experience including 10 Years with Wells Fargo, formerly Wachovia Bank and First Atlanta Bank. Specializing in Traditional and Alternative lending.

Follow me and our Videos below!

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LINKEDIN
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