Frequently Asked Questions
MCA Debt Restructuring FAQs
What is MCA Debt Restructuring?
MCA Debt Restructuring involves renegotiating the terms of existing merchant cash advances to make repayments immediately more manageable, often by extending repayment periods, and reducing the cost of this expensive financing. It is a legal transaction, involving legal negotiations and changing your existing MCA contract terms. Accordingly, MCA debt restructuring is best done by MCA debt attorneys, who specialize in this niche.
What are the risks associated with MCA Debt Restructuring?
Potential downsides include legal complexities and the risk of damaging relationships with creditors. If the risk outweighs the rewards you’ll realize, then we will discuss why and supply you with other strategies and tactics to pursue vs. using our professional MCA debt restructuring services.
How can MCA Debt Restructuring benefit my business?
Benefits are immediately realized: lower repayments (up to 75% lower), extended repayment terms, and at least a 25% reduction of your total debt balance all lead to immediate improvement in cash flow which leads to peace of mind, less stress and a happier you.
As an example, a new client recently engaged our services with $100k of outstanding MCA balances, and approx. $4,000 per week in associated repayments. We were able to cut their weekly repayment to $1,000/week, which is a $3,000 weekly improvement to cash flow, without adding any new debt. In addition, the total payback now is less than $72,000 – saving over $28,000 (28%) off the original debt balance. That reduced payback number already includes any program fees.
How do I know if MCA Debt Restructuring is right for my business?
If you are in or near default, you need to do something. The MCA companies won’t just let you keep the money. Start by evaluating your financial standing, business goals, and long-term viability to determine if restructuring is a suitable option. If you can pay your MCA debts as originally agreed, then you should. It’s when you can’t pay as agreed, that debt restructuring is the path to pursue. In the case where you see trouble coming, it is always in your best interest to reach out for professional help sooner, rather than later.
What are the fees to restructure my MCA debt?
There are no upfront or hidden fees for this service. Typically, your payments will be reduced by 50% to 75%, and you will save 25% or more off your total debt balance, inclusive of program fees. We understand that reaching out for help can be daunting but consider the significant savings and improved payment terms that MCA debt restructuring offers. This service provides exceptional value, which is why we named our company Value Capital Funding—to deliver great value in resolving challenging financial situations.
Will restructuring my MCAs affect my credit score?
Importantly, MCA debt is typically not structured as a loan, it’s an ‘advance’. Therefore, MCA transactions are credit neutral – having no positive or negative affect on your personal credit scores. Remember, MCAs are not loans, so they don’t report to FICO. 99.9% of MCAs also don’t report to business credit bureaus either – Experian, Equifax, or Dun & Bradstreet. An MCA debt restructuring transaction is confidential – between the MCA company, represented by an attorney, and the attorney assigned to your file – and not reported publicly to any of the bureaus.
What is the process for restructuring MCA debt?
It is a quick process, but much depends on you. If it’s a front burner issue for you, then it is for us as well. We are built for speed since many with MCA payment issues have daily repayments. First, we’ll speak over the phone, then collect a few documents from you to assess your current debt. That all happens same day. We’ll then have you on the phone with one of our payment analysts who will present you with a written proposal tailored to your situation and using your real-time details in the documents you submit to us. That call will not be a sales call. It is informative and will lay out your options. If you want to move forward, you can sign that written proposal to secure our team’s services. We’ll also outline how we’ll negotiate with your lenders. Whether you work with us or not, we cannot overstate the importance of using attorney-led professional assistance in navigating this process. To be clear, the MCA niche is highly specialized, and you should only work with a team who has proven that competency repeatedly. In other words, this is the wrong time to have your general business attorney try his/her luck in dealing with your business’s MCA repayment problems. Or worse yet, it’s the absolute wrong time to give yourself a haircut and try going it alone. It’s your business you are fighting for.
