Did your business default on an mca merchant cash advances in the past? If your business wants to get a cash advance again, consider new program options here.
Some businesses that have defaulted on one or several mca cash advances in the past decide they want to get advances again because they now understand the amounts and daily payments they can handle and make. Programs are also available for businesses that have missed cash advance payments, or have had delinquent or lapsed payments.
How to get another MCA Merchant Cash Advance after a default
Step 1: Research companies online that offer merchant cash advances to businesses that have a previous default on an mca cash advance. Closely review restrictions for terms and conditions of approval.
Step 2: TIP – Repayment of a previously defaulted merchant cash advance as well as the amount of time since the default may affect your ability to be approved under different programs. Ask if there is a minimum time requirement since the cash advance default. Know the month and year your business first officially defaulted and the amount of the default. Default reporting drags on time wise in business and personal credit reports and makes it look like the default was much more recent than the original date the merchant cash advance company declared a default. Any payments you made on the default often do not appear on the business and personal credit reports a lender looks at and you will not get credit for any payments made. Provide documentation of the payments made.
Step 3: Select the programs that your business will most likely qualify for.
Step 4: Make contact with these lenders that fund with previous defaults. Try to verify how likely your business is to meeting the funding program conditions and requirements.
Step 5: Submit an application for funding. Provide all documentation you have that improves your chance for an approval. Provide documentation that proves the time since the default and if any payments were made.
Step 6: If approved, review terms and conditions. Rates and terms will not be as favorable for some time on your advances after defaulting.
FAQ Frequently asked Questions on getting an mca merchant cash advance after defaulting
Why will most cash advance companies not fund me after a merchant cash advance default?
If your default was within the last two years, almost all cash advance companies believe your chances of going past due again are too high. Lenders want to see an extended period of time after a default before giving your business funds again. That often is two years. A few programs will consider funding again after approximately six months. The amount of time may be shorter based on your businesses situation. Does your business generates over $50000 per month in revenue? Then it will be more likely to get another cash advance sooner after a default.
Can I get a merchant cash advance after a default?
Yes. In about 6 months after a default your business may be considered for another cash advance and other types of financing. Approval depends on how well your business has recovered and also how much revenue it now has per month.
How long after a default can I get another cash advance?
Your business can be considered for another cash advance and other funding types 6 months after a default. Keep good records and documentation on the exact time you were formally declared a default by the previous cash advance company.
How do I know if I defaulted on a cash advance in the past?
You should have received correspondence through the mail or email or by telephone that your delinquent cash advance was declared a default.
What if I did not repay any of the the defaulted cash advance?
It may be easier to get another cash advance if you repaid or settled the defaulted cash advance. This is because future lenders would rather know that your business made an effort to repay some of the advance or tried to reach a settlement to pay a lower amount to try to satisfy the debt.
Can I get more if I repaid the merchant cash advance that I defaulted on?
The dollar amount of a future advance after a default depends more on your current revenues and situation rather than if you repaid the merchant advance you defaulted on. Partially or fully repaying a cash advance after a default will play a bigger role on whether you will be approved or declined.
I defaulted on more than 1 cash advance. Can I still get another mca cash advance?
Yes. You may still be able to qualify for a new advance. Approval depends a lot on how many advances you had as well as how long it has been and the total amount you defaulted on.
Does it matter how much the amount of the defaults were?
The amounts of the defaults do matter and will be looked at along with other things such as how much revenue your business is making now. If your business is making good revenue and profits now that will help. If your business is making more revenue than before that will make your profile even stronger after a default.
I am still in collections on my old merchant cash advances. Can we still be approved for funding?
Yes, your business still has a chance to qualify for more funding. Provide the details of the collection activities and they will be reviewed.
I am still negotiating with attorneys on my previous defaults. Can I still qualify for a new advance?
Your business may still qualify for a new advance if you are still negotiating on your previous defaults. Collections and negotiations on old defaults and non payments can go on for months or years. Any repayment or settlement will be looked at along with how much time has gone by since the original default.
I paid a settlement on a merchant cash advance instead of defaulting the entire amount. Can I show a settlement letter and get another business loan or advance sooner?
You may be able to get another business loan or cash advance sooner if you paid a settlement instead of the full amount. Defaulting on the full amount of the mca cash advance is the worst way to go. Paying a settlement shows that your business made effort to pay money that was owed and that your business was still profitable enough to pay a settlement amount rather than a total default.
Get the best merchant cash advance renewal terms your business will qualify for. Terms as long as 12, 16, and 18 months and lower rates. In some cases, 24 months and low rate factors.
How to get the best merchant cash advance renewal terms, lower rates and longer terms. How to Direction:
Step 1 Talk with a representative at your current mca company. Give them your most recent three months business checking account statements and ask them to review your file in advance of their underwriting reviewing your request.
Step 2 Ask the representative to estimate the renewal amount, the number of months and rates. Ask for a better rate on a renewal.
How to Tip: If a renewal offer is made, ask for at least a 2% lower rate on each renewal. Some cash advance companies will not pre-review your file. If they won’t, let underwriting process your file.
Step 3 Tell your current cash advance company that you are shopping for a better offer and are comparing their offer to others.
Step 4 Apply with one or two competitors. If they beat your current mca cash advance companies rate and terms, take their approval offer and ask your current cash advance company to beat that offer. Review the funding stipulations to make sure you can provide everything needed to close.
Step 5 Decide on the best of the offer terms, complete the transaction and receive funding.
FAQ frequently asked questions on how to get the best merchant cash advance renewal
How can I get the best merchant cash advance renewal?
Review your most recent 3 months business checking account statements yourself. Compare the average monthly deposits, average daily balance and NSF Overdraft activity with the same numbers on the bank statements you provided when you were approved for your first advance. If the numbers or your credit is the same or better, then you have a good chance to qualify for a better renewal offer. For example, the amount may be higher. The term may also be longer and the cost lower.
Why is my cash advance renewal not longer than before?
The cash advance renewal term will be the same as the one you originally took out unless ask for a longer term. If you had a good pay history or your credit score has gone up, then the funder may give you a longer term on a renewal. MCA Companies want you to have a shorter term because the risk is lower to them. Because of this, ask for a longer term when you apply.
Can I apply for a renewal of my cash advance if business has been bad?
Contact the lender before you apply for a renewal and talk to a representative. Tell them the problems your business has had since the you first took the advance and ask if it will prevent your company from getting a renewal
What is interest on interest on an mca cash advance?
Interest on interest on a cash advance is when you renew before it is paid off but you still pay interest or finance charges on the amount you have not paid yet. Even though the old contract is ending the interest on that old contract may not be forgiven and rolled into the new mca contract. Some funders will forgive the remaining interest owed but many will not
Make a list of this specific information. Discuss it in advance of applying with all cash advance companies you want to talk to. You may be able to either pre-approve yourself or pre-decline yourself before applying. It is better to know you will likely be declined before applying, rather than applying and being declined.
If the cash advance company is not willing to seriously pre-review your file, you can choose to apply anyway. Your goal is to get as many cash advance companies to pre-assess your file as possible. Do not demand they do in order to apply. If you demand that the cash advance company pre-reviews your file, you may be eliminating yourself from the best option available.
Is your cash advance renewal not enough? Then a 3rd position cash advance for instance, is another option.
Representatives service the following cities in the Western Region and can be contacted.
Alaska, Hawaii and California
In Anaheim, CA and Anchorage, AK. Bakersfield, CA and also in Carlsbad, CA. Chula Vista and also Fontana, CA. Fremont, CA and in Fresno, CA. Hayward, CA and Honolulu HI. Irvine, CA and in Madera, CA. Modesto, CA and also Merced, CA. Oakland, CA and in Ontario, CA. Oxnard, CA and Riverside, CA. Roseville, CA and in San Francisco, CA. San Jose, CA and also San Diego, CA. Santa Ana, CA and in Santa Clara, CA. Santa Rosa, CA and Sacramento, CA. Salinas, CA and in San Bernardino, CA. In Santa Barbara, CA and also Santa Maria, CA. Sunnyvale, CA and in Stockton, CA. Thousand Oaks, CA and Vallejo, CA. Ventura, CA and also in Visalia, CA.West Region:
Representatives in the following cities may also be contacted:
Nevada, Oregon and Washington:
In Bellevue, Washington and Eugene, OR. Everett, WA and in Henderson, NV. Kent, Washington in addition to Las Vegas, NV. Olympia, WA and also Portland. Reno, NV and Seattle, WA. Olympia, WA and in Paradise, NV. Portland, OR in Renton, Washington. Salem, OR and in Seattle, WA. Sparks, NV as well as Spokane, WA. Tacoma, WA, Vancouver, Washington and Yakima, Washington.
Arizona and Utah:
Albuquerque, AZ and Avondale, AZ. Chandler, AZ and in Flagstaff, AZ. Gilbert, AZ and in Glendale, AZ. Goodyear, AZ and also Mesa, AZ. Nogales, AZ as well as Ogden, UT. Phoenix, AZ and in Peoria, AZ. Provo, UT and Scottsdale, AZ. Salt Lake City, UT and also Scottsdale, AZ. Surprise, AZ and also in Tempe, Arizona. Tucson, AZ, Yuma, AZ and San Tan Valley, AZ.
Colorado, Idaho, Montana, New Mexico and Wyoming:
In Albuquerque, NM, Aurora, CO. Boise, ID and in Cheyenne, WY. Colorado Springs, CO as well as Denver, CO. Helena, MT and Lakewood, CO as well as Santa Fe, NM.
Consultants in the following cities can be called to schedule a same day appointment
or call: 919-771-4177
Kentucky, Virginia, Washington, D.C., and West Virginia: In Alexandria, VA and Arlington, VA. Chesapeake, VA and in Hampton, VA. Huntington, WV and also in Kenner, VA and Lexington, KY. Louisville, KY as well as Lynchburg, Virginia. Newport News, VA and in Norfolk, VA. Petersburg, VA and also in Portsmouth, Virginia. Richmond, VA and Roanoke, Virginia. In Suffolk, Virginia and also Virginia Beach, VA.
North Carolina, South Carolina:
In Anderson, SC and Asheville, NC. Cary, North Carolina and also in Chapel Hill, NC. Charleston, SC and in Charlotte, NC. Chattanooga, TN as well as Columbia, SC. Concord, NC and Davidson, TN. Dunn, NC, Durham, NC and Fayetteville, NC. Franklin, TN, Gastonia, NC. as also in Greensboro, NC. Greenville, SC, Henderson, NC as well as Hickory, NC. High Point, NC, Kingsport, TN and Knoxville, TN. In Maudlin, SC, Memphis, TN and also Morristown, TN. Murfreesboro, TN, Myrtle Beach, SC and Nashville, TN. North Charleston, South Carolina as well as Raleigh, NC. Sanford, NC, Lenoir City, TN and in Shelbyville, TN. Spartanburg, SC, Wilmington, North Carolina and Winston-Salem, NC.
In Cape Coral, FL, Clearwater, FL and Daytona Beach, FL. In Jupiter, FL, Fort Myers, FL as well as Ft. Lauderdale, FL. Hialeah, FL, Jacksonville, FL and Lakeland, FL. Melbourne, FL, Miami, FL and Ocala, FL. Pensacola, FL, Kissimmee, FL as well as Naples, FL. Orlando, FL, Ormond Beach, FL and also in Palatka, FL. In Palm Bay, FL, Pensacola, FL and also Port St. Lucie, FL. Saint Petersburg, FL, Sanford, FL and Tallahassee, FL. In Tampa, FL, West Palm Beach, FL as well as Winter Haven, FL.
Alabama, Georgia, and Mississippi:
In Atlanta, GA, Augusta, GA and Birmingham, AL. Gulfport, MS, Hoover, AL and also Huntsville, AL. Jackson, MS, Mobile, AL as well as Montgomery, AL. Savannah, GA, St. Mary’s GA and also in Talladegha, AL.
Arkansas and Louisiana:
In Baton Rouge, LA and Fayetteville, AR. Forrest City, AR, Lafayette, LA and Little Rock, AR. Metairie, LA and New Orleans, Louisiana. Baton Rouge, Louisiana, Shreveport, Louisiana and also Lafayette, Louisiana.
Oklahoma and Texas:
In Arlington, TX and Austin, TX. Bartlesville, OK, Beaumont, TX and in Corpus Christi, TX. Dallas, TX, Edinburg, TX and in El Paso, TX. Ft. Worth, TX, Houston, TX as well as Killeen, TX. Lafayette, LA, Mission, TX and Muskogee, OK. Oklahoma City, OK, McAllen, TX and also in New Braunfels, TX. Round Rock, TX, San Antonio, TX, as well as Shawnee, OK. Sugarland, TX, and The Woodlands, TX as well as Tulsa, OK.
Representatives in the following Midwest cities can be contacted:
Illinois, Indiana, Wisconsin:
In Anderson, IN, Carmel, IN, and Aurora, Illinois. Chicago, Illinois, Elgin, Illinois as well as Rockford, Illinois. Joliet, Illinois, Lee’s Summit, Missouri and in Naperville, Illinois. Springfield, Illinois, Peoria, Illinois and also in Elgin, Illinois. Waukegan, Illinois, Cicero Town, Illinois as well as Champaign, Illinois. Bloomington, Illinois, Decatur, Illinois and Eau Claire, WI. Fort Wayne, IN, Gary, IN and in Indianapolis, IN. Madison, WI, Milwaukee, WI and Naperville, IL. Green Bay, Wisconsin, Kenosha, Wisconsin, and Peoria, IL. Racine, WI, Springfield, IL and also Waukesha, WI.
Michigan and Ohio:
In Akron, OH, Ann Arbor, MI and Canton, OH. Cincinnati, OH, Cleveland, OH and also Columbus, OH. Dayton, OH, Dearborn, MI and in Detroit, MI. Flint, MI, Grand Rapids, MI as well as Marion, OH. Maysville, OH, Muskegon, MI and Parma, Ohio. Toledo, OH, Wilmington, OH, Wyoming, MI and also Youngstown, OH.
Kansas, Nebraska, North Dakota and South Dakota:
In Council Bluffs, NE and Kansas City, MO. Lawrence, KS, Omaha, NE as well as Wichita, KS.
Iowa, Minnesota, and Missouri:
In Bloomington, MN and Columbia, MO. Davenport, IA, and also Des Moines, IA. Duluth, MN and also Independence, Missouri. Kansas City, Missouri and Minneapolis, MN. Overland Park, MO as well as Rochester, Minnesota. Springfield, MO, St. Charles, MO as well as St. Joseph, MO. Springfield, Missouri and St. Louis, Missouri. St. Paul, Minnesota and St. Cloud, MN.
In Albany, NY, Batavia, NY and Buffalo, NY. Cheektowaga, NY, New York City, NY as well as Niagara Falls, NY. Rochester, NY, Schenectady, NY, Seneca Falls, NY and Syracuse, NY.
Maine, Vermont, New Hampshire and Massachusetts:
In Bangor, ME and Boston, MA. Burlington, VT, Cambridge, MA and Concord, NH. Montpelier, VT, Newton, MA as well as Portland, ME. Providence, MA and Springfield, MA. In Warwick, MA as well as Worcester, MA.
Pennsylvania, Maryland and Delaware:
In Allentown, PA and Baltimore, MD. Bethlehem, PA, Columbia, MD and Dover, DE. Harrisburg, PA, Lancaster, PA and in Lansing, MI. Lebanon, PA, Manchester, PA as well as New Castle, PA. Philadelphia, PA, Pittsburgh, PA and also Reading, PA. In Salisbury, MD, Scranton, PA and Towson, MD. In Weirton, PA, Wilmington, DE and also in York, PA.
Connecticut, New Jersey and Rhode Island:
In Bridgeport, CT and Camden, NJ. Hartford, CT, Jersey City, NJ as well as Milford, CT. New Haven, CT, New London, CT and Newark, NJ. Norwalk, CT and Norwich, CT. Providence, RI, Stamford, CT and also in Trenton, NJ.
Close my business account to stop a mca merchant cash advance? If you are considering it, it is usually the worst way to get out of a merchant cash advance.
Some companies such as debt settlement companies recommend doing so as part of their settlement process. Don’t close your account. Choose an alternative below now. Complete the Secure DocuSign Secure DocuSign 30 Second Application here.
Or call us at Tel: 1-919-771-4177, or Question?
FAQ frequently asked questions on closing a checking account to stop an mca cash advance payment
Is there a better option than closing my business checking account to stop an mca daily payment?
Working with the advance company to negotiate a repayment if you can is better than closing the account.
Closing your account may be your last option to consider when you cannot negotiate a repayment you can handle.
Can I close my business checking account to stop a cash advance daily debit?
Closing your account is not allowed and is considered an intentional default in most cases.
It is better to contact the mca cash advance company and try to work out a solution.
What happens when I close my account to stop a cash advance daily payment? Can I be sued?
It will likely be considered an intentional default. The cash advance company may take legal
action against you and your business through a lawsuit filed in state court in the county your business
is located in.
The following is what many debt settlement companies tell customers to do.
Sign a contract with the debt settlement company. The contract often allows the debt settlement company to represent your business in communications with lenders and mca merchant cash advance companies.
Pay the debt settlement company to start the process.
Close your business checking account per the instructions or advice of the debt settlement company
Allow the debt settlement company to continue to represent you in settlement talks.
There are several problems and possible severe consequences to closing your business checking account to stop paying cash advances or loans and signing a contract with a debt settlement company.
The lender can also consider this an intentional default or fraud.
The lender or mca company can file a certificate of judgement and may also be able to debit funds in other accounts you may have at the same bank or other banks
You may not be able to talk to the lenders or cash advance companies directly any more even if you want to. Language in the contract may not allow you to talk contact the funder directly
You may not have influence over the final settlement agreement.
The contract you sign take power and decisions out of your hands and puts much of it in the hands of the debt settlement companies.
Other options and alternatives to contracting with debt settlement companies and closing your business checking account
Contact the lenders directly and try to discuss your financial situation and reach an agreement with the lenders yourself.
Payoff the merchant cash advances with other loans if the balances are low enough
Discuss your financial situation with a business attorney
The advantage of some of these options in general is that they either show you are sincerely trying to work with your lenders to settle your debt, are forming a coherent strategy to do so, or have officially determined that you cannot pay. These also have advantages over closing your account.
Your business can get an mca merchant cash advance renewal with lower rates and longer terms by choosing one of several programs available here.
The same programs also offer mca merchant cash advance renewals with rates as low as 12% to 15% and up rate factors and longer terms if your business qualifies.
F.A.Q. Frequently asked questions how to get an mca merchant cash advance with lower rates.
How low of a rate can I get?
The lowest rates Start at approximately 8% to 12% rate factor for the best credit, longest time in business and strongest cash flow. For most businesses, rates in the low teens and higher are the lowest rates for merchant cash advances.
My mca merchant cash advance rate is super high. How can I lower my rate right immediately? I need to get a lower payment today or by the end of the week.
Lower your mca merchant cash advance rate right now by paying it off with a lower rate advance. Use the funds from your lower rate advance to payoff the remaining balance on your new advance. This works especially well when the balance of your existing advance is low.
There are some merchant cash advances that are similar to and work like a line of credit. Your business can borrow, repay, and re-borrow over and over. With these programs, your business can repay before the financing is paid off. By repaying before your balance is $0, you are able to use the product like a business line of credit.
Can we get a business loan instead of an mca merchant cash advance?
Yes, for many program options, your business can get a business loan instead of an mca merchant cash advance. Business loans will require a higher personal credit bureau score, usually around 575 to 600 or higher. A regular business loan may also require a longer time in business of longer than 1 year or longer than 2 years.
Yes, your business can get a business loan instead of a merchant cash advance if you qualify. Like the line of credit option, a regular business loan usually requires at least 1 year or more time in business and at least a 575 – 600 credit bureau score. Contact us for details.
2nd position merchant cash advance programs with fast closing are available immediately. With good cash flow merchants can afford more than one advance. Funding the same day with the most competitive rates available. Apply below.
Step 1: Review your business funding needs and cash flow. How much more can your business afford to repay per day and per week?
Step 2: Determine the approval amount your maximum daily repayment equals. The average cash advance is 9 months or 189 days. If the maximum additional daily payment your business can afford is $100 per day then $100 X 189 = $18900.
Step 3: Select the funders with the products that best match your businesses needs as well as credit and time in business.
Step 4: Contact the best second position cash advance options. Discuss your business profile with the representative. Select the best matching program for your business and apply.
Step 5: When approved look at the daily or weekly repayment and the mca loan contract. If you want to close, then provide all the required closing documentation and complete the transaction.
Step 6: Complete the transaction and receive funds into your business checking account.
More on a 2nd position cash advance, including specific cases and requests.
F.A.Q.’s, Frequently asked questions on a 2nd position merchant cash advance.
What is a second position cash advance?
A 2nd position merchant cash advance is when a business takes out a cash advance while having one advance they are already paying on. In doing so the business will have a second cash advance that his considered to be behind the first advance. The business will then be making payments on two cash advances. The second merchant cash advance company considers the existing advance payment into their decision to approve a second advance as well as for how much and how long.
I want a second position merchant cash advance with low rates. Do you offer second positions that have longer terms?
You can be approved for another mca cash advance position and get rate factors as low as 1.19 if your business qualifies. If you already have a first position now, you may be able to payoff your existing first position cash advance and have just one advance.
How do renewals work on a second position?
Renewals are available when your existing cash advance is 50% to 75% paid down.
What are the longest terms?
Terms are usually a maximum of 360 days. In some cases up to 10 years is available if the business qualifies.
Can you payoff my existing advance and make it into one loan?
your existing position can be paid off if your balance is low enough. Estimate the balances on your existing advances when applying.
How important is credit?
Credit is not the main factor. strength of cash flow is more important.
I need a low daily or weekly payment and for my daily payment to be lower than it is now. Can I get a lower payment than I have now?
The lowest daily and weekly and also monthly payments are available. terms as long as 24 months or longer are available to lower your payment.
Do I have other options if I do not qualify for a second position?
Other options include accounts receivables financing and asset based loans. For accounts receivables financing, your business can get paid about 80% of the face value of the invoice immediately. Once the company you have invoiced pays then your business will get the remaining amount owed less a 1% to 5% fee. Asset based loans can be against real estate or certain types of equipment.
Why is my second position less than my first position?
The second position is almost always less than the first position. This is because the first position approval amount was supposed to represent the most your business was able to handle and repay. So a second position would be less unless your business revenues increased since your business took out the first position.
Why is my 2nd position cash advance a higher rate than the 1st position?
A 2nd position is considered a higher risk than the first position
My offer for a second mca cash advance is too low. Why is it not higher?
Your second cash advance offer is probably lower because it is additional funding behind an existing cash advance. The amount offered matches what your business can repay./h6>
How can I figure out if my business can afford an mca merchant cash advance? Calculate if your business can afford a business loan. If so, step by step instructions on how much of business loan or advance your business can afford. To get more information or apply for an advance safe for your business, begin below.
Can my business afford an mca merchant cash advance?
Find the lowest deposit month of your last 3 months business checking account deposit totals. Example, $50,000.
Take that figure and multiply it times .20. This is approximately the amount you should conservatively be taking for an mca merchant cash advance.
Contact mca companies and apply. If you are approved for more than your recommended safe amount, do not take more unless you are sure you can make the payments.
Close the cash advance and funds are deposited into your account.
How much of an advance can my business afford? Example, how to calculate:
Below is an example of how to estimate a conservative funding amount.
Look at your most recent (3) months business checking account statements. Find and add the amount of your total deposits. Most banks give you one amount and list it as “total deposits”. Some banks will also have a separate entry for electronic deposits. If your bank itemizes different deposit types, add them up. Example figures are below.
December total Deposits $25,000
January total Deposits = $15,000
February total deposits = $19,000
The lowest month is January at $15,000 in total deposits. Multiply $15,000 X .2 = $3,000. $3,000 is a safe and conservative amount.
A more aggressive amount is $15,000 times .5 = $7,500.
Figure out your daily payment. On average, the term of an mca merchant cash advance is approximately 6 months. For $3,000, your daily payment will be approximately $3,000 X 1.35 % (6 x 21) = $155.77 per business day. There are approximately 21 business days per month. The rate factor used here is 1.35.
If you can handle this payment for 6 months, you can close the transaction.
Other factors that affect offer and approval amounts:
Depending upon other factors such as time in business, average daily balances and amount of revenues, the funder may offer a much larger business loan or advance. Your business may be able to handle a larger amount. The purpose here is to determine what is a conservative and safe amount.
More disposable income with higher deposits
Businesses with higher gross deposits can often afford a higher advance. This is because the same percentage of disposable income equals a higher dollar amount. If your business has fixed total expenses of $7,500 out of $10,000, then it has disposable income of $2,500.
When gross deposits are $100,000 and fixed expenses are $75,000, then disposable income is $25,000.
In the later case, a business will be able to handle a larger merchant cash advance, because their total gross deposits are higher.
Many businesses continue to take out merchant cash advances by renewing them once they are paid off. If your business is taking out a merchant cash advance for the first time, try a lower amount first to make sure your business has the cash flow needed and can handle it. If so, you can take out a larger amount on a second advance.
FAQ, Frequently asked questions can my business afford an mca merchant cash advance?
I need an mca merchant cash advance payment I can handle and pay. I need a cash advance safe for my business. How can I get that?
Refer to the formula above to figure out how much of a payment your business can afford. Also consider how much that would be per month. When businesses takes out an mca merchant cash advance with a daily payment, they often do not calculate how much that will be per week and per month.
How can I get a business loan that I can pay? I do not want a cash advance to put me out of business
Refer to the affordability calculations above. Every business is different but you can estimate approximately how much your business can pay. Start out with gross revenues, then calculate an average % of gross deposits. Daily mca cash advance payments should not exceed approximately 15% to 20% of gross deposits.
What if my business has a slow month? Can I just lower the daily payment or should we get a lower advance to begin with?
It is best to take your lowest month and take a percentage of that. You can still take a percentage of the average of your last three months to decide how much you can afford to repay as well but then you may not be able to repay if you have a low month.
We are a seasonal business. How can we figure out if we can repay a merchant advance?
Review your payback months. This means that you need to figure out what your business usually does during the months it will be repaying the cash advance. Are those high months for your business or low month. It does not matter if your business does well in the fall if summer is usually slow and your repayment is in the summer.
Choose from several options to lower your daily mca merchant cash advance payments safely and quickly. No settlements, coj filings, or having to default. You do not need to close your accounts. Your business and business reputation is not harmed.
Your payments can be safely lowered or eliminated without hurting any of your relationships, including vendor relationships. Apply below to arrange for lower payments :
Avoid closing your business checking account and being declared in default. These lower daily payment options are safe. They typically prevent a coj certificate of judgment from being filed against your business when you act immediately.
FAQ, Frequently asked questions:
Question: How are my payments lowered?
Answer: The daily and weekly payments are lowered either through a payoff , consolidation or restructuring. You will be paying much less than you are paying now. Your business pays a lower amount for a longer period of time.
Question: How much can I get my daily mca payments lowered?
Answer: You can get the payment lowered 25% to 50% in most cases. Sometimes the payments can be lowered as much as 50% to 75%.
Question: I have more than 1 advance. Can I get my payment lowered on all of them?
It may be possible to lower or pay all of them off even if you have 2 or 3 advances.
Question: I have several advances. Can you help me?
Answer: You can get help you need even if you have as many as 4 or 5 advances.
Question:Are there any problems with lowing my daily payments?
There should not be any risks if you are approved for one of these programs and follow through on paying off the other advances. The biggest risk is not acting in time. Act before you miss payments and are declared in default.
Question: I am being told by my merchant cash advance company that I signed the contract and so I have to keep making the payments I agreed do. They are telling me there is no other option. what can i do?
You are not stuck and there are in fact other ways to get out of the problem. You can pay them off or pay less. The best way is to just study what options are available for you to resolve your cash advance problem. You will almost always find out there is a better way ahead than staying the same course you are one. Review the options and decide which option is best for you. This will depend on your individual business circumstances and cash flow.
Question: Can I get a monthly or weekly payment instead of a daily payment?
Answer: You may qualify for a monthly payment program for enough to payoff the balances. Your business may get help it needs, even with a much lower weekly or daily consolidation payment. Your monthly cash payments can still be 25% to 50% or lower.
Is your mca payment is too high? Reduce it without settlements, coj filings, or having to default. No closing accounts or harming your business reputation.
Get a longer term merchant cash advance with terms up to 12, 18 or 24 months. These are some of the requests people have when they want a longer term merchant cash advance. They want more time on their cash advance.
We specialize in longer term loans and longer term merchant cash advances.
FAQ’s Frequently asked questions on how to get a longer term merchant cash advance
How can I get a longer term merchant cash advance for 12 or 24 months?
Your business may qualify for a longer mca merchant cash advance if your credit and time in business is strong enough. Businesses with time in business of over 1 year and credit scores over 625 may qualify for longer terms of 12 months or longer.
I need a cash advance longer than 6 months. How can I get that
Make a list of all longer term cash advance programs and the main requirements. Ask what the approval requirements are. Go down the list and eliminate the programs that you clearly do not qualify for. For the remaining programs, look at the benefits and requirements. Call and discuss the programs with a representative directly to see if you qualify for more than a 6 month term. If you feel your business will qualify then apply.
Longer term merchant cash advance. Longer term options than a mca merchant cash advance
Monthly payment options.
Many programs have a monthly payment option. Monthly payment business loans are harder to get and be approved for. Credit scores also have to be higher, often 660 or higher. The minimum time in business will need to be a year or more. The average daily balance of the business checking account has to be $2,500 to $3,500 or more.
Leaseback real estate
If your business has commercial real estate with equity in it, one option for much longer financing is to leaseback real estate. Funding amounts will usually be much higher and the terms are much longer, as long at 5 year or more. Payments will be monthly instead of daily or weekly. There can also be major tax benefits to this approach. Contact your tax professional for details using this method.
Asset based loan
Another option to getting a longer term merchant cash advance or longer term funding is to convert the merchant cash advance into something else. That involves a payoff. The new funding can payoff the old funding. One option is a loan against equipment. This type of funding is 24 to 48 months with a monthly payment. Equipment such as construction equipment, semi-trucks and also some types of machinery may qualify.
Accounts receivables financing
Accounts receivables financing does not directly get the merchant longer term financing. However, it can be an excellent way to improve cash flow and eliminate the need for a merchant cash advance or short term loan in the first place.
If a business can improve their cash flow and not have to take out another short term advance, they can avoid taking out a business loan. This type of financing should be seriously looked at when funding options are considered.
“I don’t want accounts receivables financing” or “I don’t want factoring”, some clients tell us.
Many merchants are resistant to merchant cash advance financing. They are afraid their client accounts will not like it and they will lose that account.
Merchants can tell their clients that their accountant recommended factoring to improve cash flow. They can call their client and say:
“My accountant told me to look at factoring. Do you all offer that?”
This question is more of an indirect approach and less threatening to your customer. If they do not want to factor, they will feel less pressured since it was your accountant’s idea and may just say no.
Chance are very high that your customer is already factoring for other clients like your business and your business is not the first one they are would factor.
Extending merchant cash advance terms
Some final options include calling the merchant cash advance companies and asking for longer terms. This is less desirable because it means that you will not be fulfilling the contract terms as originally agreed. Therefore, the merchant cash advance company does not have to agree to longer terms and can consider doing so a default.
Longer term merchant cash advances are not easy to get. The entire risk model on which it works is based on short term financing with the customer. Their risk analysis shows that past due accounts and charge off’s increase a lot if the term is over 1 year.
Funders that do merchant cash advances do not want a long term relationship with their clients for one funding. They want renewals and also repeat business but not a long term with each transaction.
This is especially true if the merchant already has one cash advance. For merchants that already have one cash advance, merchant cash advance companies are reluctant to offer a longer term on any new advance.
The amount of monthly deposits is probably the biggest factor in being approved for a business cash advance. However there are many factors that decide merchant cash advance qualifications and guidelines. How do you qualify? Read the factors below to learn if you qualify, and for how much.
What are the biggest factors qualifying factors for a cash advance?
The biggest qualifying factors are total monthly deposits, time in business, credit, cash flow and many more profile characteristics. Applicants want to know in advance: Will my business qualify for a business loan? Secure DocuSign 30 Second Application here
Call us at Tel: 1-919-771-4177, or Question? Contact us here.
Increase your chance of getting business funding greatly by knowing ahead of time what merchant cash advance qualification and guidelines typically are.
We specialize in identifying which mca programs their business will qualify for. While these are not business loan approval secrets, they give you a very good idea if your business will qualify and for how much.
Apply below to find out how much your business will qualify for. You can also complete the application form and input contact information. A representative will contact you to review your options.
FAQ Frequently asked questions on Merchant cash advance qualifications and guidelines
How can you qualify for an mca cash advance? What are the qualifiers?
The biggest qualifier is the average of the last 3 months total deposits to your business checking account. The average daily balances along with time in business, type of business and number of nsfs or overdrafts is also important.
How important is credit to qualifying for a cash advance?
A better credit score helps your business get more money and longer terms. Bad credit
usually does not make a difference between approval and decline. A higher credit score will also give you a program with better overall terms and conditions.
What are the guidelines for time in business for a cash advance?
To qualify, the guidelines are at least 3 months time in business, also known as TIB. If your business has just under 3 months time in business you can send a month to date daily activity printout of the current month to request an offer.
What do the guidelines say for qualifying for a higher amount? What are the qualifications for more money?
To qualify for more money higher, higher deposit totals along with better credit and a longer time in business.Having less existing debt when you apply is also important. If your disposable business income and cash flow are low when you apply then your business may not be able to handle a larger loan. If the cash flow is still strong then you may qualify for a higher amount.
500 + bureau score.
Many programs have a minimum credit score requirement of 500. Some programs require a credit score of 525. Other programs either do not have a credit bureau score requirement, or have a 550 minimum.
51% + Ownership
Many MCA Merchant Cash Advance programs and lenders require at least 51% ownership to close cash advance funding or other loans. Another requirement under some programs is to have any owner with 25% or more ownership listed on the application and also be a signer at closing.
Minority ownership means any owner with less than 50% ownership. This can also mean an owner that has between 1% and 49% ownership in a business or enterprise. Another option some lenders offer is to approve and close financing with owners who are less than 50% owners. However, this is not the norm and also rare and hard to find.
6 months time in business
Many lenders and funders have a minimum time in business requirement of 6 months. Others lenders that have more than a 6 month requirement have a 12 month, or 1 year time in business requirement.
Less than 6 months time in business
Another main minimum requirement is 3 months time in business by some lenders. Some lenders and mca merchant cash advance companies do not have a minimum time in business requirement but need at least 2 months proof of business income, or 2 months proof of revenue. These are considered start up businesses. Find more information on start up businesses here.
$10,000 or more per month in deposits
A high percentage of funders require the merchant to have a minimum of $10,000 or more per month in deposits. Some merchant cash advance companies offer funding programs that require only $5,000 or $7,500 per month minimum deposits. However it is harder to find mca merchant cash advance companies that offer funding with the business depositing less than $10,000 per month. We can place your business in programs that only require $5,000 to $7,500 + per month in deposits.
5 Overdrafts or NSF’s or less per month
Another frequent requirement is for the business to have no more than 5 Overdraft or NSF occurrence items per month. In 2017, some MCA Merchant cash advance companies began to offer programs with 7 or 8 Overdrafts or NSF occurrences per month allowed, but this is also not common.
Less than 5 Deposits per month
Most funders require 5 or more deposits per month. A few require less, such as 3 or 4, but the majority still require 5. Merchants call in and complain that they were denied for too few deposits even though they had 5 or more deposits per month. How can that happen? To find out the answer, we need to look at what lenders and mca merchant advance companies consider a “deposit”
What is the definition of deposits per month?
A source of a deposit is from revenue the business has generated from sales and true business operations. The following is a list of deposits that are not considered business deposits:
1) Small dollar amounts such as less than $100. This dollar figure can be higher, even $200 or $300 and funders may not consider that deposit because the dollar amount is too low.
2) Transfers from savings accounts or other accounts are also not considered deposits. The reason for this is that the funder does not know if the original source of those transfers are from real business revenue.
3) Credits, rebates and other non revenue deposits. Many times, businesses will receive small credits and rebates from other merchants that are not true revenue and are not considered such by lenders.
No restricted industries
Most mca merchant cash advance companies have industries that they will
not lend to and restrict funding to. You can ask in advance if your industry is one of those types of businesses they will not fund. For more information see a list of restricted industries here.
Many of the criteria listed above are minimum criteria. Many lenders and merchant cash advance companies list a minimum criteria but may still decline the merchant even if the company applying meets that criteria.
In their analysis, if your company profile meets merchant cash advance qualifications and guidelines criteria, they will consider the request, but might still not approve it.
If you have questions or need assistance to find out if you will qualify, call us for complimentary assistance. We have more resources that can be offered in kind to see if you will qualify.
The best Merchant Cash Advance Consolidation Programs
Many businesses have short term daily or weekly repayment advances, known as Merchant Cash Advances. The repayment on these advances are short term, usually between 2 and 18 months. Some businesses have several advances with daily debits at the same time. This is causing significant cash flow problems for many businesses. The following is an overview of how the best Merchant Cash Advance Consolidation Programs work. Complete the secure Docusign >>>15 Second Application now.<<<
Or call us at Tel: 1-919-771-4177. Click here to Consolidate now
Consolidation programs are being offered by some alternative funders to improve or rescue businesses from cash flow emergencies. Getting this help is sometimes the difference between the life and death of some businesses.
Beware: Some Merchant Cash Advance Companies are advertising Merchant Cash Advance Consolidations when they really end up only offering you another advance.
If you need a real Merchant Cash Advance Consolidation & not another advance, discuss this with the lender upfront. Some companies use this lure to simply offer another advance. It depends on the company. Some Companies will try to consolidate, but you may not qualify. If your business has 3 advance, your business may not qualify for a consolidation of all 3, but may qualify for a Consolidation of 2 of the 3 Advances. The Advance with the best terms can be left in place the the other 2 advances may be Consolidated. They are paid off, the term is extended and the daily mca merchant cash advance payments are lowered.
However, beware of companies that advertise a Consolidation which could be a bait and switch to giving you another advance. Try to determine if they are really trying to Consolidate, or making no effort to Consolidate and just want to sell another advance.
There generally are 4 basic types and approaches of MCA Merchant Cash Advance Consolidations. This includes cash flow relief and debt settlement company options.
Merchant Cash Advance Consolidation Type 1:
This approach is a true effort to reduce the daily payments business merchants have to make. The Consolidation or “relief” lender covers the payment of the Merchant’s existing advances by depositing the weekly total of their daily payments into the Merchant’s business checking account once per week. The consolidation lender then debits a lesser daily amount than the daily total of the Merchant’s other advances. This reduced daily repayment for the Consolidation is normally between 20% and 50% lower than what the Merchant is currently paying.
The repayment of the lower amount usually continues for a few months longer than the remaining time the merchant is scheduled to pay the existing advances. The Consolidation lender reduces the daily payments for the Merchant by extending the term of the debt. This arrangement gives businesses cash flow relief. For this type of financing, complete the contact information below.
The following is an Example of how this 1st type of Consolidation works:
Acme, Inc. has 3 daily repayment Merchant Cash advances. Each has a balance of $25,000 and will continue for 20 more weeks. The daily payment on each is $250 for a total daily payment of $750. This equals $3,750 per week and $15,000 per Month on average.
For this type of cash flow relief type Consolidation, the payments are usually reduced in the 25% to 50% range. Let’s assume a 50% reduction is offered. The lender will be referred to as the Consolidation lender.
The Consolidation lender deposits $3,750 once per week into the Merchant’s account. The Merchant then begins repaying the Consolidation lender $375 per day instead of $750. This saves the Merchant $375 per day, $1,875 per week and $7,500 per Month. The Merchant continues paying 40 more weeks.
The benefit to the Merchant is that they have improved their monthly cash flow by $7,500 per Month.
Merchant Cash Advance Consolidation Type 2:
The second type of Merchant Cash Advance Consolidation is less common. It is a true Consolidation. The business Merchant provides the Consolidator the total payoff balances of all of their existing advances. The Consolidator verifies the payoff and then pays off the existing advances. The Merchant then begins to repay only the remaining one Consolidation debt. The Merchant also pays the Consolidation lender for a longer period of time. This allows the Consolidation payment to be lower than what the Merchant had before.
The following is an Example of how this Type 2 approach works:
Acme, Inc. has 3 daily repayment Merchant Cash advances. Each has a balance of $25,000 and will continue for 20 more weeks. The daily payment on each is $250 for a total daily payment of $750. This equals $3,750 per week and $15,000 per Month.
In this type of cash flow relief Consolidation, the Consolidation lender pays off each Merchant Cash Advance for a total of $75,000. The Merchant then begins paying the Consolidation company. The amount and terms of the repayment are lower, as in the 1st Example of $375 per day. The term is now 20 weeks instead of 40.
Merchant Cash Advance Debt Restructuring Type 3:
In this case, a Merchant has several merchant cash advances and is having trouble repaying them. The Merchant either cannot qualify for the weekly cash flow reduction and Consolidation program, or wants a different option.
The Merchant still must have cash flow relief. In this method, the Merchant contacts their existing MCA Merchant Cash Advance lenders directly. The Merchant tells the Merchant Advance companies that they soon will not be able to continue paying the daily payments. They need a pause or reduction in the daily payment, or both. Some Merchant Advance companies are more receptive to this request than others. Each request will be considered on a case by case basis and the final decision will be at the discretion of the lender.
It is important for the Merchant to make a strong case for a reduction or pause in payments. They cannot be too demanding but they must give strong reasons. The Merchant Cash Advance lender must know the Merchant truly has short term cash flow issues it won’t survive. By addressing the problem now, the Merchant and Merchant Advance company both win. The Merchant can be put in a position to repay the remaining advance, and the Merchant Advance company will can be repaid. If an agreement cannot be reached, the Merchant will miss payments or default.
Merchant Cash Advance Debt Restructuring or Consolidation, Type 4:
Debt Restructuring companies or options can be considered the last and most dangerous for Merchants. This should only be considered if the Merchant cannot get a Consolidation program and is not able to renegotiate better sustainable repayment terms with their existing advance companies.
In most cases the Advance companies will work with the Merchant as much as possible to reach a workable solution. If that does not happen, the Merchant may be forced to consider remaining alternatives.
There are a few final options:
The Merchant has talked with their Merchant advance companies and could not come to an agreement to reduce or pause payments enough. They determine they cannot continue to make the payments much longer. The Merchant can hire a business Attorney to negotiate a settlement or reduced payments with the Advance companies on their behalf.
The Merchant contracts with a 3rd party Debt Settlement company. This option may be the least desirable of all the options because debt settlement companies may take actions that are not in the Merchant’s or Merchant Cash Advance company’s interest.
A Debt Settlement relief company often tells the Merchant they will get the daily payments to stop and tells the Merchant to sign a contract for them to negotiate with the Merchant Advance Companies. The Merchant is often told to begin paying the 3rd party debt settlement relief company instead. They may tell also tell them to close the business checking account from which the daily payments are being debited and open a new account at another bank to pay them. This is almost always a major mistake and may cause both the Merchant and Merchant Advance companies the worst problems.
Debt Settlement Relief Company Pitfalls
These scenarios may cause several major problems for the Merchant. The Merchant cash advance contracts are always between the Merchant and the advance companies, not the Debt Settlement companies. The MCA companies are under no obligation to talk to or agree to anything the debt settlement companies are asking for. Knowing this, some debt settlement companies call the Merchant Cash Advance companies, tell them their customer cannot repay and the Merchant Cash Advance company better accept a very low settlement amount rather than get nothing. The Merchant may have begun making payments to the debt settlement company and may still not be much better off than they were before, if at all.
What is a Certificate of Judgement?
The Merchant cash advance company may have a COJ, certificate of judgement. If the Merchant closes their business checking account from which the daily payment is debited, it often considered an immediate default per the contract. The Advance company may be able to get a Court judgement within 1 to 2 days.
This judgement is used to debit funds from any account the Merchant has with any bank.
The Debt Settlement company should be concerned with this. They may only be concerned about the contract they have with the Merchant to pay them now. The debt settlement company may provide little or no assistance to the Merchant to deal with these consequences. Payments are made to the debt settlement company in the short term leading up to the Merchant being hit with severe actions by their existing Merchant Advance companies.
With some of this information, consumers whose businesses have Merchant Cash Advances may be able to better determine the best Merchant Cash Advance Consolidation programs or cash relief programs they should choose. Merchants should do further investigation on their own. Each situation and contract may be different and call for different decisions and actions.