Understanding Merchant Cash Advances
There are many reasons a business chooses to take out a merchant cash advance, but the primary one is this: necessity. The merchant cash advance system is relatively new in the toolbox of financial tools. They’re one of the only options left to small businesses in need of financial help, and they have become predatory.
At Merchant Cash Advance Law Firm P.C., attorney Dominick Dale takes on the fight for businesses facing the struggles of overcoming merchant cash advances. You and your business have rights, and debt collectors can be extremely aggressive with you. As your lawyer, Mr. Dale will stand up for you and defend your business tooth and nail.
How A Merchant Cash Advance Works
A merchant cash advance is allegedly not a loan. The Merchant Cash Advance companies alleged that It is an “advance” on future earnings in your business attached to your accounts receivable. These companies may go further and place a UCC lien against your profits, which could put you out of business.
Interest rates on these loans are often extremely high, far in excess of what a standard operating loan is, and paying them off is difficult without a settlement.
Why MCAs Are One Of The Few Options For Businesses
Merchant Cash Advances (MCAs) are often considered by businesses for several reasons, although it’s important to note that they may not be suitable for every business, and there are both advantages and disadvantages associated with this financing option. Here are some reasons why MCAs might be considered as one of the few options for businesses:
- Quick Access to Capital: MCAs typically offer a quick and straightforward application process. Businesses in urgent need of capital may find MCAs appealing due to their speed of approval and funding.
- No Collateral Requirement: Unlike traditional loans, MCAs are unsecured, meaning businesses don’t need to provide collateral. This can be advantageous for businesses that lack significant assets or are unwilling to pledge collateral.
- Flexible Repayment Structure: Repayments for MCAs are often tied to daily credit card sales or a percentage of daily revenue. This flexible structure can be appealing to businesses with fluctuating cash flows, as they repay more during profitable periods and less during slower times.
- Approval Based on Revenue: MCAs are often approved based on a business’s daily credit card transactions or overall revenue, rather than traditional credit scores. This can make them accessible to businesses with a less-than-perfect credit history.
- Ease of Qualification: The qualification requirements for MCAs are generally more lenient compared to traditional loans. Businesses with a short operating history or lower credit scores may find it easier to qualify for an MCA.
But, as they say, the Devil is in the details. The easier the process the harsher the penalty. Rest assured, the MCA will make sure it does everything it can to be repaid.
What Debtor’s Rights Defense Does
Attorney Dominick Dale gets right to work for clients. He learns the details of their case and provides a detailed plan of action for them. Then he gets to work as the tough, bulldog litigator he is to protect you, your rights and your business.
As your lawyer, Dominick Dale will fight for your business with the strength you deserve from your attorney. Reach out for a consultation by phone at 347-619-6500 or send an email using this form.