People put their sweat equity as well as their money into the businesses they build, but sometimes they get out over their skis with too much expensive debt. Most of the time, this is Merchant Cash Advance (MCA) debt we’re talking about.  The stifling payments for this high-cost debt can choke a business’s cash flow.  High-cost debt can also keep business owners from taking a salary for themselves, so they’re unable to pay their personal bills too. The effect of this type of debt can be widespread as you can see.

Take this general contracting business that came to us for help. The business had a steady annual revenue of about $734,000 but had $217,000 in MCAs – almost a third of its revenue!  Those of you not in our line of work may say “how does this happen,” but believe us, it happens all the time and many times with even worse debt-to-income ratios.

The owner, Chuck, was really struggling to stay current with his debt repayments because inflation caused his material prices to soar, sharply increasing his overhead. He was on the verge of having to start skipping some of his payments. And he hadn’t paid himself in three months. Things at home were tense to say the least.

Chuck was obligated by contract to allow his MCA funders to pull $1,290 a day from his business bank account. That’s $6,450 a week in cash flow being sucked out of his business. And it wasn’t just the money. His attention wasn’t fully on his day-to-day projects because his mind was always on how he was going to keep all these balls juggling in the air without dropping anything and doing serious harm to the business he’d worked his butt off to build.

Here comes the good part.

Chuck called us here at Value Capital Funding, and after talking with Chuck about his situation, we enrolled him in our Debt Restructuring program and our attorney-led teams worked their magic.

They restructured Chuck’s three MCAs, lowering his debt payments from $6,450 a week to $3,042 a week – a cash flow savings of $3,408 a week or 53% down!

Plus, Chuck is saving $56,420 off his total debt balance due, inclusive of fees – a 26% savings!

Chuck’s story is the reason we do what we do. When he told us we’d saved his business AND his marriage, it was the best feeling in the world.

If your business is struggling with MCA debt like Chuck’s was, we’d love to help. Just click the link below to schedule a few minutes to talk to us and see if Debt Restructuring is the solution you’ve been looking for. It could be the most important call you make today.

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