Merchant Cash Advance "MCA" Consolidation
If your business needs cash quickly and has a readily ascertainable history of credit card receipts, or a constant flow of cash deposits, a Merchant Cash Advance "MCA" may provide the funding you require, in the shortest time possible. But what happens when merchant cash advances begin to kill your cash flow, and you continue taking out more MCA's just to pay the others down? Are you drowning in merchant cash advance debt and have have stacked 2, 3, 4, 5 or more merchant cash advances on top of each other and find your business spiraling out of control? 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.
What is the 50% net rule?
Everyday, small business owners attempt to consolidate merchant cash advances and come up short, due to the 50% net rule. So, what is the 50% rule? Simply put, your current 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%). Reality is, the chances of your revenue increasing that greatly in a short amount of time is slim, so rarely do MCA's 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 today are getting bombarded by brokers and lenders selling MCA's, so eventually one contacts you that talks a good game, and they sell you another one. 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...... LVRG has a solution!
If you have multiple merchant cash advances and have been able to make your payments on time; we can consolidate your balances, stretch out the term, while often times including additional capital. This equates to lower payments, additional capital and some much needed breathing room.
Client had 3 open merchant cash advances with an outstanding balance of $69,206.08. Our consolidation saved her $1,648.00 per week and we funded an additional $30,000 to grow her business.
Merchant cash advances can be a great funding option for small businesses for many reasons, if you use them wisely and have a plan. However, if they don't align with your cash flow model or if you stack them on top of each other (and most lenders are happy to bury you in debt) it's easy to let them spiral out of control. If you have multiple merchant cash advances and the payments are killing your cash flow, don't wait one more day....Call us NOW! Phone (855) 998-LVRG or click below. We're here to help....