Merchant cash advances with a Monthly and Weekly repayment. They are also available for the ACH bank statement working capital program. Businesses are approved using the cash flow they are making into their business checking account.
Qualifying Merchants can have a weekly or monthly repayment and move away from the common daily repayment. Doing so takes the pressure off of the Merchant.
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Businesses often prefer the weekly and monthly repayment options. Customers have been asking for monthly and weekly payment options. Callers have also been requesting Consolidation options.
Calls often have a cash flow emergency or are desperate to payoff short term advances. Some merchants say they cannot handle the advances and must term them out. Merchants also say their business may close if they cannot extend the advances they have.
If the business can qualify for a weekly or monthly repayment option, they won’t have to worry each day about having a cash flow emergency.
[caption id="attachment_9829" align="alignleft" width="150"] Weekly and Monthly repayment options for Merchant Cash Advances.[/caption]
This reduces stress on businesses. It can help a business from getting behind on the daily repayment. The daily repayment often causes a business to more quickly get itself into a cash flow problem that it may not be able to recover from.
Qualifying for most ACH business merchant repayment options requires a business to have 1 Year or more in business and consistent cash flow. Businesses that are seasonal, have been in business for less than 1 Year, have major ups and downs in their cash flow may have to choose the daily or weekly repay. For those businesses, having the weekly or monthly repayment can lower the burden of having to make a much larger payment at the end of each week.
Businesses may have good overall monthly cash flow, but some low ending day balances during the month. With a weekly and monthly ACH business merchant repayment, more businesses will be able to meet their repayment terms. A monthly repayment will have much less of an affect on their cash flow. Businesses can use a loan calculator to determine the different repayment terms.
Customers can review the repayment terms to see which one works best for their business. Some businesses prefer a short term daily repayment option. This can work like a bridge loan for some businesses.
For more information on all business loan options, visit the SBA small business administration.
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.
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 negotiation 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.
Do you need to lower daily mca merchant cash advance payments immediately? Is your account overdrawn because the mca companies keep debiting the daily payment? What can you do? Apply for one of several options below that do not involve settlements, closing your bank account, being declared in default, nor having a cash advance company file a coj certificate of judgement against you.
How to lower daily mca merchant cash advance payments
Can I get a monthly payment loan to pay these off?
Yes. One of the ways to lower your daily mca merchant cash advance payments is to get an alternative loan to pay off the mca cash advances. By doing so, you will be lowering the payment because your monthly payment on the loan to pay off the mca’s will be much lower than the monthly amount you were paying on the daily cash advances.
Usually, you will be paying 50% to 75% less if you are successful in securing a monthly loan to pay the mca’s off.
What if the cash advance companies do not want to lower the payments?
You may have to push hard to get a concession. If your business had a true hardship, such as a hurricane or another type of hardship, make that known.
If that fails, read the mca merchant cash advance contract in detail.
Make sure you know exactly what can happen if you do not pay. It may be advisable to seek legal advice through an attorney if you know you cannot repay the advances.
If you know in advance your business will not be able to repay the advances, you can use the time in advance to:
– Determine what your options are
– Know what actions you can legally take
I cannot pay my advance. What can I do?
Check your state laws to find out if your state has special protections and laws. Some laws vary by state. Negotiate with the cash advance company either directly final options may include bankruptcy.
Should I get my Attorney to contact the mca merchant cash advance companies?
Whether you should get an Attorney involved in talking with the cash advance companies varies on a case by case basis. In some cases, having your Attorney contact and negotiate with the cash advance companies is a good idea.
If you are offering to work with the merchant cash advance companies and they are not working with you, this may be a good situation in which your attorney contacts them.
Some mca merchant cash advance companies are more willing to work with customers than others.
If you do not feel comfortable negotiating or discussing your past due debt with mca merchant advance companies, this may be another reason to involve an Attorney.
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. Business owners should know that intentionally closing your business checking account is considered a default by many merchant cash advance companies and lenders.
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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.
FAQ – Frequently asked questions.
Question: Why can’t I close my account? I don’t have the money. The merchant cash advance companies will overdraw my account. I have to close my account.
Answer: There are cases when the mca merchant cash advance companies or other lenders may overdraw your account too much and too severely in a few days. You may feel this is a reason you have to do something. This can be a very valid concern. Anticipate in advance your account being overdrawn.
You should know several days in advance that your account may be overdrawn. Look at alternatives. If it is too late and you know the daily payment will overdraw the account, consider contacting your bank and change your account to not pay any items that will overdraw the account.
F.A.Q.’s, Frequently asked questions, comments and requests.
“Need an mca merchant cash advance renewal with better rates”.
Also frequently requested:
“I want an mca merchant cash advance renewal with lower rates and better terms.”
Answer: 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.
Click above to complete 15 second request form.
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 (zero), 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.
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:
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.
“My daily mca merchant cash advance payment is too high.”
“I need a lower daily merchant cash advance payment”. If one of these frequent requests applies to you, review several options here to lower your daily mca merchant cash advance payments safely and quickly.
If you think your payments are too high, review your choices here. We specialize in lower daily merchant payments. Your payments can be safely lowered or eliminated without hurting your business. Get the lowest payment now rather than than paying the same amount. Most of all, apply now below:
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, or comments:
How are my payments lowered?
Answer: The outflow of daily and weekly cash out of your business account is lowered by covering the debit of your existing advances until they are all paid. Your business is relieved of the merchant cash advance payments you are now making. Your business then pays a lower amount for a longer period of time.
How much can I get my payments lowered?
You can get the payment lowered 25% to 50% in most cases. Sometimes the payments can be lowered more, as much as 50% to 75%.
I have more than 1 advance. Can I get my payment lowered on all of them?
They may be lowered on all of them if you have 2 or 3 advances.
I have several advances. Can you help me?
Sometimes all of the advances cannot be lowered or eliminated immediately. You may be approved to lowering either most of them or all of them. The rest are lowered as you pay.
What are the risks?
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. Get rid of your mca merchant cash advance problem before it gets ahold of you.
I am being told by my merchant cash advance company that I signed the contract and I have to make the payments I agreed do. Am I stuck?
You are not stuck and there is also another option or two. You can pay them off or pay less.
My daily mca merchant cash advance payment is too high. Can I get a monthly payment instead?
You may qualify for a monthly payment program for enough to payoff the balances. Then you can payoff the merchants cash advances with the monthly payment loan. If your business does not qualify for a monthly payment, it may still benefit just as much with a weekly or daily payment.
The total amount paid can still be lowered just as much.
Get a lower daily payment today and also save your cash flow. Talk to a counselor today.
“I need a longer term on my cash advance”. “I need an advance for 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.
Hundreds of businesses have gotten long term funding and a longer term merchant cash advance through programs listed below. We specialize in longer term loans and longer term merchant cash advances. Together we will get the longest term for you. Apply now below: Secure DocuSign 30 Second Application here.
Or call us at Tel: 1-919-771-4177, or Question? Contact us here.
FAQ’s Frequently asked questions and comments:
“How can I get a longer term merchant cash advance?”
Look at your overall business and based on your profile, try to figure out what are the longer term funding options your business might qualify for. See the list below. You may see that your business will not qualify and save to time.
“I need an advance longer than 6 or 9 months. What can I do? Make a list of all longer term programs and the main requirements. Ask what the approval terms 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. Another option is to also contact the funder directly for assistance.
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.
“What are common business loan and merchant cash advance approval requirements that lenders have?”
They include things such as total revenues, 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 ?” They also want to know business loan approval requirements and cash advance approval requirements.
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. Contact us below:
Get an approval today for the best program for you. Apply now below:
Merchant cash advance qualifications and guidelines
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 Merchant’s daily payment is 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.
Not enough deposits – MCA Merchant Cash Advance Declined
What does not enough deposits mean?
Businesses have used MCA Merchant Cash Advances and ACH loans to a great extent in recent years to finance their businesses. One of the reasons Companies are declined is for not enough deposits or too few deposits per month. They are not making enough deposits into their business checking account per month. The business account has limited activity or no activity in one of the most recent months.
How can your business overcome being declined for a Merchant Cash Advance or ACH bank loan for having too few deposits? There are several tips that your business can follow to get financing, either right away or in the short term.
What are too few deposits ?
This is usually less than 4 Deposits per month.
Most frequent Requests:
– I was declined for a merchant cash advance for having too few deposits, or not enough deposits. Help me get a merchant cash advance.
– We were declined for an ACH loan for not having enough deposits. What resources are available to help our business overcome this?
How to get approved with little or too few deposits per month
Talk to lenders in advance and find out if the lender has a minimum number of deposits per month needed to be approved for financing. We can direct your business to these programs so that you can apply for the right program and can get approved.
Other options if declined for not enough deposits per month for a merchant cash advance
Make more deposits immediately during the rest of the month and apply at the start of the next month. A deposit to a business checking account statement is often from several customers. Retailers usually have several checks and cash from several customers, go to the bank and make 1 deposit. Instead of 1 large deposit, break the deposit into several smaller deposits over the course of 2 or 3 days.
Talk to the Merchant Cash Advance companies and ACH business loan lenders directly about being declined for not having enough deposits per month. Ask them if there is anything that can be done.
If you know the deposits you make into your business checking account have multiple items, you can tell the Merchant Cash Advance company or ACH business loan company.
What are multiple items?
Multiple items means that the funds in the deposit are from more than 1 customer. If the merchant cash advance company knows this, you can get a copy of the deposit from the bank. The copy of the deposit will show the items deposited. If it is 5 items, you may get credit for 5 deposits instead of 1. You may be able to get the MCA company to change the decline to an approval. A number of ACH lenders and merchant cash advance companies are open to this.
If this does not work, ask how long you have to wait before they will consider you again. Be clear on what they want to see the next time so you will not be declined again.
Get working capital through other loans
If the options above do not work or you cannot wait, your business can consider other types of business loans. Which ones are best depend mostly on your company’s profile. Choices include:
– Monthly Term loans up to 48 months based on Tax Returns
– Accounts Receivables Financing
– Business loans based based on Real Estate or Equipment Assets
With one of the above options, your business may overcome being declined for a MCA Merchant Cash Advance or ACH business loan for not having enough deposits and get the needed funds. The SBA small business administration also has excellent resources on alternative business loans