An Ultimate Guide To Handle Your Cash Advance Debt
Are you carrying a heavy cash advance debt that is hindering your business growth? If yes, then don't worry because we are here to help you resolve your issue. This article will be a quick guide to help you get out of this situation and improve the chances for your business's growth.
If you are under a serious Merchant Cash Advance loan or any such loan that is affecting your business in a bad way, we are going to help you in cash advance relief. This article will discuss why you should not choose Merchant Cash Advance loans while going for a debt to expand your business. We will also tell you a practical cash advance debt solution.
What is Merchant Cash Advance Loan?
Merchant Cash Advance is a huge loan that small business owners typically choose to expand their business. The borrowers repay the loan with unfixed interest in most cases. The interest rates increase when the credit sales are high and are lower when there are not many sales of credit and debit cards. There is a daily withdrawal of money from their account for repayment of the fund.
Merchant Cash advance is one of the most popular and easiest ways of getting a huge amount of cash for your small business. That is why most small business owners go for it. It may sound easy and beneficial, but actually, its cons outweigh its pros, and the small business owners might be a great loss while opting for a Merchant Cash Advance Loan.
Downsides Of Merchant Cash Advance Debt
Along with the hidden charges, there are some other downsides of Merchant Cash Advance debt than other debts. You must be aware of those cons while choosing Merchant Cash Advance for your business.
Comparing Merchant Cash Advance to any other possible type of debt, you will notice that it is way more expensive than any different kind of loan because there are no fixed interest rates. Along with that, it has many additional hidden charges as well, which you should consider.
● Increase in Interest Rates
The interest rates for the repayment, in most cases, are not fixed. Your Merchant Cash Advance lender gets the payment according to the sale of credit cards and the profit you make each day. They might increase the interest rates if you delay payment.
● Daily Withdrawal From Your Bank Account
A considerable share of your daily profit from the sale through debit and credit cards to pay for the huge sum of money you got from the Merchant Cash Advance lender. The amount is always unexpected and depends on your daily profit.
● Stumbling Block For Your Business’s Growth
Whenever your business is in profit, the merchant cash advance gets a greater share from the profit. This cycle of unexpected daily withdrawals will prove to be a stumbling block in your business's growth and promotion. As a result, that will inhibit the progress of your business.
● Credit Scores Won't Get Improved.
If you want to build a credit card history to get a better loan for your business in the future, Merchant Cash Advance will not help you. It is because lenders do not notify you about your timely repayment of money to the credit bureau, affecting your credit scores.
Possible Solutions For Merchant Cash Advance Loan Relief
Now that you know that Merchant Cash Advance is in every case not helpful and it can impede the growth of your business. If you have already fallen prey to such serious loans, don't worry because we give you a cash advance debt solution.
· Refinancing MCA Debt With A Long Term Loan
In case you are in a heavy short-term debt that is impeding your business's growth, one of the possible solutions is to go for another debt which should be easy and long-term debt. You can now pay your Merchant Cash Advance lender using that money.
· Collateralizing by Underlying Assets
You can go for asset-backed loans. These kinds of loans give the lender a certainty that the borrower will return the money in time. One of the benefits of collateralizing your underlying assets is that the interest rates will be much lower for the repayments.
· Readjust Interest Rates and Payments
If the high-interest rates are affecting your business, you can renegotiate with your cash advance lender. You can show them that you can pay the money according to the new terms. In this way, you can get help with cash advance relief if he gives you better repayment terms.
· Hiring A Debt Relief Lawyer For Negotiation
If you don't have much knowledge about the legal terms of cash advance debt, you can go for hiring a debt relief lawyer who can provide you with a cash advance debt solution. The lawyer can negotiate with the lender or the financing company on your behalf.
· Debt Consolidation
Another good way for cash advance relief is debt consolidation. It helps if you are under multiple loans at a time. Debt consolidation means getting a bigger loan to pay for all the existing loans. It will make the task easier and lower the interest rates because it has fixed interest.
· Bankruptcy File Casing
If your business is suffering badly from the shortage of funds due to the increasing interest of Merchant Cash Advance loans, the last option is to file a bankruptcy case. Although it will have a negative effect on your credit scores, it will prevent your business from failing.
ConclusionAbove, we have mentioned some of the most efficient and practical ways to solve your cash advance debt problems. Following that advice, you can protect your business from going to a great loss. We hope that this article would have increased your knowledge and would help you handle your cash advance relief easily.