Sep 3, 2022
Are you feeling trapped after taking merchant cash advances? Is your business suffocating due to reduced cash flow? Or, are you looking for a simpler way to get out of MCA debt? Whatever it is, you can get significant relief from MCA debt consolidation if possible.
MCA debt consolidation is the best way to improve cash flow by lowering your monthly cash payments so that you can stay afloat and grow your business.
When you are struggling financially and you don’t get the needed help early, you might even face business failure and have to close down your business. That’s why MCA debt consolidation is a necessary step for many MCA borrowers.
Understandably, a lot of business owners acquire MCA loans for expansion and fulfilling emergency needs because MCA loans are quick and easy to obtain and don’t require collateral or a higher credit score. However, sometimes, those loans accumulate quickly and become nearly impossible to manage. That’s where MCA debt consolidation comes into play.
Though there are different ways to refinance or consolidate your MCA loan, you should expect more manageable and affordable monthly payments regardless of your choice.
A business MCA consolidation loan is not the same as a business loan refinancing. While refinancing means that one loan is replaced with a new loan at a lower interest rate, MCA debt consolidation means consolidating different loans into one loan. While the terms may sound similar, both are different options. With the refinancing option, your one loan can be refinanced into another loan with lower interest rates. However, when it comes to debt consolidation, you need to have multiple loans which you can consolidate into one.
When paying multiple debts, you should know about the two methods of paying off debt.
With the avalanche method, you start paying off the debt with the highest interest rate aggressively and make minimum payments on the remaining debts. It helps you save more money in interest.
On the other hand, with the snowball method, you pay off the smallest debt first no matter what interest rate it has. This method helps motivate you psychologically as you get to finish small debts one by one quickly and have less number of debts to pay.
However, when it becomes difficult for you to make even minimum monthly payments, the best way is to choose the pathway to MCA debt consolidation so that you have only one loan to repay and don’t have to worry about so many loans that you have taken.
MCA debt consolidation is a better solution when you are struggling with unsupportable daily payments and a throttled cash flow. When you reach out to an MCA debt consolidation company, the company will buy all your cash advances and roll them into one single payment at a lower interest rate and more manageable term.
However, not all debt consolidation companies work the same way or have the same requirements.
Some financiers require a business owner to net 50% of the loan amount after the cash advances are paid off. It means that a new loan for $100k can only be obtained if the business owner owes an amount of less than %50k to the other creditors.
On the other hand, other financiers are willing to pay off the entire amount of cash advance debt but don’t offer any new funding.
When you choose reverse consolidation, all of your merchant cash advances remain in place but the lender covers the cost of daily or monthly payments, and, in return, you pay that company a fraction of what you were paying, just for a longer term.
So, you can say that debt consolidation and reverse consolidation may work in different ways but both of them are inherently the same.
Depending on the lender, you will be given different choices to consolidate your MCA loans. At Royale Capital, we offer three options for MCA debt consolidation:
1. MCA Debt Restructuring - There are no restrictions on minimum FICO scores; however, this option is available for those borrowers who have at least $50,000 of total debt. No matter which industry you belong to, you can qualify for this option and start saving immediately.
2. Working Capital Loan - This is a great option for those who need a working capital of $25,000 to $500,000. It is not an MCA or cash advance product. It comes with a 5-year term and requires you to pay monthly. There is no need to pay off your existing debt. What’s more, you can use this amount to pay off your MCA loans. However, it is available for only those who are in business for more than 5 years and have an official business space. Businesses with residential, mailbox, PO Box, UPS, or any shared office setup address are not eligible. Plus, the guarantor must have a 680+ credit score.
3. SBA Loan for Debt Consolidation - It is a good option for those who have a minimum of $150,000 in total debt. With this option, you can get up to $5 million with a 10-year term and lower rates. It is a federally-guaranteed SBA loan and numerous industries qualify for this debt. Keep in mind that 10 to 20% down payment and collateral are typically required for SBA-guaranteed loans. Plus, you also need to fulfill the eligibility criteria defined by the SBA.
If you are looking for MCA debt consolidation, look no further than Royale Capital. We will discuss your financial situation and relief options. If you agree to any of our options and are willing to go further with us, you will pay us a reduced amount monthly to engage your creditors, and we will negotiate full and final settlements with your creditors. Did you know most of our clients become completely debt-free after24 to 48 weekly payments? Yes, that’s true. Schedule a consultation with us for MCA debt restructuring now!