Merchant Cash Advance Debt
If your business is in default on a merchant cash advance, or is crippled by weekly or daily withdrawals, we can help. MCAs may seem like an attractive solution for businesses that have had a disruption in cash flow or need capital to pursue a time-sensitive opportunity, but the terms are often unsupportable.
Many thousands of businesses are forced into failure as the payback on this type of advance strangles their operating funds and cash flow.
Second Wind Consultants offers businesses trapped in this situation an affordable way out of the declining debt cycle with a clear path toward regaining control of their finances—and their lives.
Immediate Relief from MCA Debt
Our process is simple. In our free, no-obligation consultation we work to understand your unique circumstances. Once we have determined that we can help your business, we design a strategy that will significantly reduce, or even eliminate, your debt.
There is no one size fits all MCA debt solution. However, our debt relief strategies are all centered around the following actions:
- We immediately protect your business financially. We’ll put a stop to the daily withdrawals and ensure that your personal finances aren’t in jeopardy.
- We negotiate a realistic settlement. Our experts work with your lenders to come to terms that are realistic for your business to meet.
- Your business saves for settlement. With relief from daily withdrawals, your business is able to save for the agreed-upon settlement.
- You settle your MCA debt. You pay the lender as described in the settlement terms and regain control of your life.
A debt workout as described above will provide you with a total resolution to your MCA debt, but time is of the essence. This is an aggressive lending cycle that is not designed in the favor of small business owners, but that doesn’t mean you have to lose everything.
What Is a Merchant Cash Advance?
A merchant cash advance is not technically a loan, but an advance against future receivables. These agreements are not held to the same laws that traditional loans are. There are very few regulations, rules, or safeguards in place to protect the business.
When a business acquires an MCA, the funds are made available virtually overnight, even in cases where the borrower has poor credit or cannot feasibly repay the loan.
A wolf in sheep’s clothing.
It’s easy, fast money, but the payback can be unsupportable. Weekly or even daily withdrawals are made from your credit card processing account or operational account, with interest rates between 30-40% or higher. A loan of $80,000 quickly becomes $120,000 for example, and is set to be repaid on a very short timeline, usually within six months.
The daily withdrawals can become enormous.
When a borrowing business begins to default, a common story plays out. The borrower will be offered another merchant cash advance from either the original company or another MCA company who is willing to lend. This second cash advance allows the business to continue to pay the first cash advance while making cash available for daily withdrawals for the second cash advance.
Stacking advances like this will assault the small business’s cash flow, forcing them into massive default and business failure by depriving them of the operating capital they need and depend on.
Defaulting on lines of credit or online short-term small business loans
The market is full of alternative lenders that offer unsecured financing in the form of lines of credit or short-term small business loans. While the terms of these agreements may differ from those of an MCA, they are funds that are made available just as quickly and easily as an advance. The payback can be just as crippling to your business as the other lending methods.
Our strategies provide immediate relief to small businesses that are struggling with debt from any of these alternative lenders.
How Second Wind Can Help
Not long after the rise of the merchant cash advance, we were assailed by an onslaught of defaulting small businesses unable to withstand the pressure of these unaffordable and enormous daily withdrawals.
We approached the lenders with traditional workout strategies only to find that these new lenders were not acting like traditional banks. They were driven to get their money and interest paid, and typically had Confessions of Judgment in hand when collecting. With no regulations, Confessions of Judgment in hand, and personal guarantees to support the payback, they were challenging adversaries.
It did not take long for us to figure out how to deal with them and we found the solution to working out these unsupportable advances. These are challenging relationships, but in the end, the lenders will settle on our terms as described.
Call 413-584-2581 or fill out our contact form to set up a consultation today. We can negotiate with any merchant cash advance company you have debt with.