Consolidating cash advance loans
The merchant will loan you the money you need, and then accept repayments towards that loan through your credit card sales, virtually guaranteeing that you do not default.
Of course, there will be interest and other fees deducted as well, but all of this will be bundled together into your payment plan.
A reputable business lender would look at your business credit score, but they will also be interested in the amount of revenue your business is making, and how the merchant cash advances are adversely affecting your cash flow.
They will then try and work with you to construct a repayment plan that you can meet easily without hurting your sales.
This, essentially will leave you with only one payment to make, where before you had multiple.
In most cases, even after interest rates and other fees are calculated, you will have more cash left over each month to work with.
You apply for a specialized lending product that details the extent of your business debt.
Once approved for the loan, the new lender will pay off the existing merchant cash advance debts.
While businesses who use cash advance can expect fast funding, with little paperwork, there is a trade off.This practice of stacking merchant cash advance loans – or ACH – can quickly put your business into a downward spiral.One solution to help you get out of this cycle of business debt is a merchant cash advance consolidation.It starts with a small merchant cash advance, which leads to another and then another.All that until before you realize it, all of your business credit card sales are going towards paying off these debts.