Are You Struggling To Keep Up With Your High Merchant Cash Advance (MCA) Debt Payments?
Since 2018, Value Capital Funding has helped over 577 small businesses nationwide solve their cash flow problems caused by having too many cash advances – and we can help your business too!
Please take just 3 minutes to watch this explainer video for a quick overview to see how we can help you.
Are you constantly struggling to keep up with your high-cost Merchant Cash Advance (MCA) payments?
Aren’t you tired of working for your funding companies?
MCAs can be a liquidity deathtrap from which many businesses never recover. Restructuring is the solution – not bankruptcy and certainly not reverse consolidations.
Our team of MCA Debt Restructuring experts and attorneys will restructure your existing Cash Advance Contracts with your existing Cash Advance Providers.
That means we immediately and permanently lower your debt payments by 40% – 75% and save you money off your total payback amount too!
Most importantly, we do all of this without any:
Plus, you’ll get Satisfaction Letters and all UCC Liens released upon completion of the program.
All Programs involve affordable pay plans designed with you to fit your budget, with a timeframe that meets your business’s needs.
Why? It’s simple. Because you can’t cure a debt problem with more debt.
So, stop the insanity. Get off the merry-go-round. Regain control of your cash flow and your business before it’s too late! Because if your MCA debt problem is severe enough, and you don’t act swiftly and decisively, then your window of opportunity to fix the problem will close.
At that point, your business that was built with sweat equity and money will usually have no choice but to file for bankruptcy. Don’t let this happen to you. What would you do then? How would you feel knowing there were strategies you could have used to save your business and your livelihood if you had only acted sooner?
Talk to us about your situation and find out how this proven strategy will dramatically lower your debt payments in just days and save you money on your total payback amount.
Let’s debunk the myths about Merchant Cash Advances and get to the bottom of what you’re really getting with an MCA.
Since The Great Recession of 2008 into 2009, access to affordable working capital has been hard to come by for many small businesses in America. Banks routinely say “NO”, and business owners get that message loud and clear.
Your business needed working capital for that big project, or for that equipment purchase, or for that planned expansion, or to finance that next client order – we get that also.
Cash flow is the life blood of any business, but small businesses can be especially challenged in this area.
Enter the Merchant Cash Advance, or “MCA” as they’re called in the industry.
By definition, a Merchant Cash Advance is the purchase by an MCA Funder of “future sales deposits – or future accounts receivables” expected by a business. An MCA Funder purchases “future sales” for less than their current value (normally 40% -50% less) which is reflected in what they call their “factor rate” (i.e. a typical factor rate is 1.49 which means you will pay back the funds you take times 1.49) (keep reading… this will be explained in more detail).
The MCA funding company provides you with a discounted lump sum of cash up front with a payback total and timeframe based on either:
Either way, these figures are derived from the average of the business’s most recent 3 or 6 months of revenue as shown by the business’s bank statements.
Most importantly, an MCA agreement is structured into 6 critical components that add up to tremendous and unsustainable costs for this type of short-term financing. They are:
Since MCA funders are purchasing your business’s future receivables, this is not considered a “loan” and the business is not considered a “borrower”. By not “lending” to a “borrower”, MCA funders bypass usury laws which address excessive interest rates thereby allowing them to charge loan-shark rates.
So, if you’re going to swim with the sharks, you should at least know the rules.
Have a look for yourself.
Does the MCA transaction below look familiar? It should, as transactions like this one are very common and occur every day:
What’s the math look like?
Hopefully, you’re sitting down because that 8% above is not your interest rate!!!
It’s the factor rate that tells you your general cost of funds, NOT the Specified Rate.
So, a 1.49 factor rate means that you are paying 49% interest for the amount of time you have those funds. That’s right, for the amount of time you have those funds!
But most MCA’s are issued for only 3-6 months (and certainly less than a full year). The term above is only for 115 days.
You mean there’s a hidden cost?
To convert the 49% into an “annual” figure, you would first divide the 49% by the 115 days (49/115) and get 0.426, which is the “daily” percentage cost of the financing. Then, you simply multiply that daily figure by 360 days in a business year to get your annualized percentage rate – which, in this case, is over 153%!
Crazy, yes! Unsustainable, right? Do you think a lot of business owners realize they’re paying over 100% annually for many of the MCA transactions they do? Answer: No way!
Do you know how many businesses have more than one MCA on their books right now?
The sad fact is that if a business has 3 or more MCA’s, there’s an overwhelming chance that the business will fail.
Most MCA Funders prohibit stacking. However, most turn a blind eye, recognize it exists in the industry, and that it happens every day.
Stacking is when you have more than 1 MCA at a time.
You put a 2nd MCA on top of a 1st, and a 3rd on top of a 2nd, and so on, until the business’s cash flow is so squeezed that it can’t continue to support scheduled payments and it’s left with multiple “stacked” MCAs to pay back. It’s similar to an investment Ponzi scheme in that the 2nd MCA is used to make payments on the 1st, and the 3rd is used to pay the 2nd, etc.
Many in the industry have referred to MCA stacking as a ‘liquidity death trap” which usually destroys the business if not remedied quickly. Stacked MCAs act like a cancer eating away at the business’s cash flow.
If it is not immediately eradicated, the business will die.
Because, let’s face it, if a business can’t repay their first MCA due to the lack of sufficient cash flow, it is flawed logic to think that it will be able to handle 2 or more MCAs with that same cash flow.
The exorbitant cost of MCA capital usually makes “stacking” the last nail in a business’s coffin.
Yet the MCA industry and its armies of aggressive “brokers” and “underwriters” do these “stacking” transactions routinely, and even proudly advertise to their brokers that they will go out to an 8th position!!! 8th position…really?! Talk about doing something to the detriment of your business!
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