Not enough Deposits – MCA Merchant Cash Advance Declined

Not enough deposits – MCA Merchant Cash Advance Declined

December 7, 2017.  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.
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.

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Our Small Business Development Center assists businesses in overcoming these obstacles so they can focus on making their business prosper.

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?

Not enough deposits per Month
Has your business been declined for not having enough deposits per month?

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.

Possible solution:

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

Borrowers should request, not demand

July 4, 2017.  Lenders frequently have customers that request favorable terms.   Banks and other lenders are not surprised when they encounter borrowers who request better terms or the best terms possible.   Borrowers should request, not demand better terms and rates.   Borrowers should negotiate rather than demand certain rates and terms.

If the borrower has trouble repaying the loan, it is better to negotiate restructured repayment.    Giving the lender an ultimatum and demanding they accept what you want to pay is often not effective.  Sometimes borrowers overstep their bounds and hurt their request by approaching lenders with a list of requirements or demands they feel they have to receive with their loan.   This is not a good approach to take with lenders.   Borrowers sometimes make the mistake of believing they are entitled to a loan and entitled to whatever terms they feel they should receive.

Borrowers often do this with the rate, closing costs and the number of months the loan can be approved for.    This happens more often with personal loans, but it also happens with business loan requests.
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Applicants will often tell the lender in advance that they will not pay above a certain rate, or will even tell the lender the rate that they want to pay.   They will also tell the lender that they do not want to pay any closing costs, even though 1 or 2 payments at closing may be a normal requirement.   Applicants may also tell the lender the term they want, 48 or 60 months.  In some cases the maximum term the lender will consider is 36 months.

Borrowers should request, not demand
When applying for a business loan, borrowers should make requests, not demands.

When borrowers do this, they may be hurting their chances of even getting the loan approved.   If a borrower tells the lender they will only pay a 7% maximum interest rate on a business loan, and the typical rate is 9%, the lender may not be motivated to offer the loan.  The lender may do nothing at that point and the borrower will have to decide if they want to go back on their demand.

The same thing applies to closing costs and terms.  If  1 or 2 payments at closing are normal and the lender does not concede on this, the borrower may be stuck.  Borrowers need to be cautious about how they present their requests.  If a borrower says they do not want to pay 1 or 2 payments at closing, the lender may take a closer look at the borrower to make sure this request is just a preference by the borrower, rather than a cash flow problem.

Borrowers with good credit sometimes incorrectly believe their profile is the best the lender sees.   Often, a borrower that believes their credit is among the best is really an average to good credit compared to the lenders overall customers.    If an applicant makes several demands and is difficult to deal with during the application process, this may be considered a red flag to the Lender.   The lender will quickly realize if the borrower is difficult to deal with during the application phase, they may be difficult to deal with as a customer and will almost certainly be hard to deal with if there are problems later.

Due to the reasons cited above, borrowers will get the best results by negotiating with lenders rather than make demands of them.

Grants are not for profit companies

Recently, some regular for profit companies have inquired how they can get free loan grants.    In general, Grants are not for profit companies, unless they fall into certain limited specific categories which sometimes change. For excellent alternatives to Grants, click below.

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The general public overwhelmingly seems to believe that there are many grants available, mostly from the Government, which never have to be paid back.   Grants are issued primarily to non profit businesses.   There are some exceptions, and those exceptions vary over time.   In some instances, States may issue grants to certain start up businesses, or to businesses in certain industries.   It is not uncommon for States, and sometimes the federal government to issue grants to businesses that are in very specific technology industries in their efforts to provide an incubator for certain new technologies.

Sometimes states will issue Grants to certain businesses in the farming sector as States wish to promote the continued health of farming in their States.   There are also instances in which certain minority owned businesses may be provided Grants.   In general, For profit businesses do not receive Grants.   Federal and State governments do not wish to provide money from revenues to businesses that are engaged in for profit endeavors.

It should also be noted that there are many companies that advertise paid services in which, for payment rendered, they will instruct the buyer how to obtain a grant.    Many of these advertisements do not indicate that these Grants are not for profit businesses and that they are only for non profit businesses.    There are also many companies that advertise books as well as online books that are sold on how to obtain Grants.   These fall into the same category in that these books are being sold on how to get something that in the vast majority of cases, does not exist.

Why Businesses get hurt if debt ceiling isn’t raised

Many business owners are conservative.   They obey the laws, watch their spending, and are cautious.   Many will say that the Government should not increase the debt ceiling knowing that the Government will be taking on more new debt.    It is a good idea for the Government not to take on new debt, but not this way.

Currently, the Government spends over 40% more than it takes into it’s coffers in revenues.   Economists have argued in past years,  by what percentage the Government can cut it’s spending in one year without hurting the economy, and many Economists felt that a cut of just 4% per year would slow down the economy short term, even if long term it benefits the country.

If the debt ceiling is not raised, or raised within one or two days after the deadline, the stock market will take a major dive.  Individuals will pull back on spending until they are comfortable with what will happen.  Large Corporations will follow suit and put on hold and delay any hiring or expansion plans.    Interest will continue to be paid or the country would suffer a true technical default.   World markets will truly be aghast and dive mostly due to the reckless self destruction.   Moody’s and Standard and Poors may impose another credit downgrade, further aggravating markets.

The Government will truly be forced to choose who receives Government money and who does not.   Watch in amusement as some of the same Congressmen and Senators who voted to not raise the debt ceiling suddenly demand that the flow of money continue for their districts.   Unemployment benefits, assistance for farming, highway money, and Government contractors will undoubtedly be among the first victims of a massive spending cut.   Companies that provide products for the military will also take massive cuts because Congress will make every effort to pay the soldiers.   If the department of education takes cuts this will cut funding to colleges and schools.   Other departments such as the Commerce department, the department of labor, and the State Department would all very likely take cuts.

While many people feel this would be good in principle, the state department includes funds for Embassies and Consulates, including the defense of those organizations.  The commerce department includes food safety and inspection.   Funding for Ports and border security have to be considered.    If the Department of Homeland security is cut, then many functions now happening would slow down.   Many of these employees would be temporarily cut.

The media effect would be tremendous.   Media outlets will interview unemployed and furloughed employees who will vent vicious frustrations.    Public opinion polls will reflect the worst ratings for Congress ever in it’s history.    Such a situation will be guaranteed not to be long term.    Congress will then quickly raise the debt ceiling.   Renewed talks of whether tax increases are justified in order to pay for desired services will begin.    People will realize the value of services lost, previously taken for granted.    Once it is accepted that the national debt must be address long term, their new found dependence of services will be weighed versus revenue increases and future proposed spending cuts.

Would Social Security not get paid post fiscal cliff?

Would Social Security recipients not get paid in a post fiscal cliff world?   Not likely, thought prospect of it is still in the cards, even if the Government does not want to go there.

The Government would almost certainly pay interest in it’s debt, otherwise the credit rating would nosedive in a hurry and future borrowing would skyrocket.    The Government knows that Seniors would be in a massive panic if their checks were interrupted.   It would be a public relations disaster.   Many seniors have no other sources of income and are not able to seek other employment.

Would Social Security not get paid post fiscal cliff Resources:

Who would not get paid if we pass the fiscal cliff?

The so called fiscal cliff is approaching, again.   So what question should, or would the average citizen be most interested in?    Maybe the first question would be, who will and won’t get paid?

There will be a lot of talk about how every one will be taken care of, but the harsh reality is that someone won’t get paid.   It will be a sure thing that that someone, of which there would be many, won’t be happy.  That may end up being the understatement of the year.  If this happens, in the end, all of the current politicians will end up being the big losers and public anger will be targeted in their direction.

As far as who won’t get paid?   Probably defense contractors will be very high on the list.   They are paid great sums of money but it is not a payment direct to the people.   It won’t make much difference though as it won’t be long before their employees aren’t paid.

Highway departments and maybe some unemployment recipients would be next on the target list.   Basically, the Government would want to keep paying interest on it’s debt but soon after, many citizens would stop receiving money.