Are you drowning in merchant cash advance debt? Are MCA’s killing your cash flow? Have you stacked multiple merchant loans to stay afloat and now you're under water? Well, you’re not alone. In fact, there are thousands of small business owners just like you that have been taken advantage of by merchant cash advance lenders and small business loan brokers whose only motivation was to line their pockets by burying you in debt.
Everyday, small business owners attempt to consolidate merchant cash advances and can't find a lender who will do it. Just an FYI, most lenders will not consolidate merchant cash advances, unless you would net 50% on the new advance. Meaning, your cash flow would have to substantiate a high enough advance amount to pay off your current MCA, while netting you at least 50% on the new one. For example: let's say you already have a $50,000 MCA, your cash flow would have to substantiate a $100,000 advance, in order to pay off your current $50,000 advance, hence leaving you with a net of $50,000 (net 50%). This rarely happens though, as many small business owners do not qualify for the 50% net rule, so rarely do these MCA's ever get consolidated. Especially, if it's a fairly new merchant loan and you were advanced $50,000, it's not likely your revenue / cash flow doubled in a short period of time, now enabling you to receive $100,000 offer. So what happens? Most small business owners contact another MCA lender or loan broker, who “sells” you another advance. And you thought they cared about you, right? Sorry! As if your cash flow wasn’t being pinched enough before, now you have 2X’s the pinch. Then in a month you need more cash, because your business simply cannot pay all your overhead, and a daily debt to multiple merchant cash advance lenders. But again you need more cash to pay the bills, so what do most small business owners do? You guessed it, contact another MCA lender or small business loan broker who sells you yet another cash advance; over and over again until the whole thing spirals out of control. Or, what’s worse… you’re out of business.
Take a deep breath, we have a solution! We have no maximum positions that we are able to consolidate and no net required - max deal size here $100,000. If you have been able to support high merchant cash advance / merchant loan payments without too many NSFs, we should be able to cut your payments by at least 50% in a full balance transfer, and often times providing additional capital. Meaning lower scheduled payments while also providing additional working capital. Ahhhhhhh!!
Below are a few differentiators from other folks in the market:
- Heavy focus on consolidations - No net 50% rule. No maximum positions consolidated. No minimum credit score.
- Repayment flexibility - We offer daily, weekly, bi-weekly and monthly repayment options. That said, we underwrite monthly repayments different than daily / weekly unless the merchant receives a single scheduled, contractual payment — we need to ensure the average daily balance is sufficient to cover our monthly draw.
- Currently, no origination, PSF, bank, ACH setup, or any other type of fee unless we are consolidating two or more positions (then it still is nominal). We also do NOT charge NSF fees — these concepts are extremely appealing.
- This MCA operates like more of a line of credit than an advance — a customer can draw additional capital at any time as long as they have been making regular scheduled payments. We will do a simple re-underwriting at no cost (focused primarily on review of bank statements to ensure they did not take additional capital and business didn’t fall off a cliff) and can typically wire the additional funds the same day (again, no fee to merchant).
When we look at consolidations, these are the main items we focus on:
- Repayment history on current advances and NSF/overdraft frequency — we should be materially cheaper, as long as you can afford higher cost advances with minimal NSF’s. *NSF's and negative days must be less than three NSF DAYS per month absolute max.
- Deposit volume and consistency — if deposits vary significantly month to month, we will typically look at the lowest month when calculating amount to offer (fund up to 1.25x deposits, up to 12 month term).
- Ensure they are current on core personal and business assets.
- Ensure the re-cap fits within our underwriting guidelines (aggregate monthly payments max of 15% to 20% of revenue).
And there you have it... Common sense solutions to common business problems. That's the LVRG Funding way!