Merchant Cash Advance FAQs

Many modern-day businesses seek to restructure loans. A loan is an upfront payment that is given to businesses. In return, loan providers receive a portion of the future sales of the business in question. Instead of being repaid monthly, however, loans are typically repaid on a weekly, or even daily, basis. If you have a few rough sales days, a loan can eat into your bottom line – significantly.

For those stuck in loan cycles, loan consolidation could very well be your solution. Typically, the financial rut experienced from a pressing loan is due to the high APR associated with this type of advance, which can total 100 percent, or even higher. Loan providers typically offer two repayment options, which include:

• Fixed daily or weekly withdrawals – Your payment plan is based on your estimated monthly revenue, and does not fluctuate.
• A percentage of your credit or debit card sales – Your payment is a set percentage of your monthly sales, which is based on your estimated revenue.

Both repayment methods have their advantages and disadvantages. With a fixed amount, your payment is predictable, but if your revenue fluctuates, you may have trouble covering the payments, which leads business owners to consider a loan settlement plan or other options. When you pay on a percentage basis, your payments will fluctuate, and if your payments are less than projected, you will likely end up paying more in fees and interest.

Business owners who are having payment difficulties sometimes end up taking another loan to cover the first one. This leads to a borrowing cycle that can be challenging to break, but there is loan relief available. Our team at Regroup Partners is ready to help you remedy this expensive financial problem!

If you are evaluating solutions such as a loan buyout, you may be questioning whether you made the right choice for your business. Loans can be a powerful tool for injecting cash into your business quickly, and when you truly need it, so a loan can seem like a tempting decision at the time. Circumstances change, though, so if your loans are keeping you up at night, you can, and should, seek loan help and advice from our knowledgeable staff.

Like any financial tool, there are Pros and Cons to utilizing a loan.

Pros:

• They are easy to obtain: The documentation for a loan is typically minimal.
• Quick funding: Underwriting is nominal, so you can get approval very quickly.
• Credit matters less: Business owners with less-than-perfect credit may qualify for a loan.
• Being unsecured: You do not need to put your home or business property to secure a loan.

Cons:

• High fees: The APR for a loan is much higher than other “traditional” financing options.
• A negative effect on credit: Although loans are easier to get, the provider may still do a hard credit check, which can harm your credit score.
• No fixed repayment term: Depending on your repayment option, your payments may fluctuate, and you could end up paying on your advance for much longer than you originally expected.
• A lack of regulation: Since loans are not technically loans, they do not have the same level of federal oversight.

Business owners sometimes default on loan contracts because loans have high payments. What happens if you default on a loan? The consequences can be stressful, leaving you worried and focused on your financial troubles rather than your business.

The reason that loan payments are so high is that they are not considered traditional loans. Banking laws, such as the Truth in Lending Act, are in place to regulate traditional loans. Loans are considered “factoring products,” which means that you sell a portion of your future business receivables in exchange for a lump-sum payment. Since it is not technically a traditional loan, loan providers are free to set their own interest rates.

The other reason that interest rates are so high, which may have you wondering how to get out of a loan, is that loan providers are taking on higher levels of risk. They work with business owners who have imperfect credit, and their repayment is based on your future earnings, which are not guaranteed. The high fees compensate for the risk loan providers are taking by lending you money.

If you stop paying your loans, you will face aggressive debt collection tactics. Typically, loan providers will attempt to contact you in every way possible. Aggressive correspondence can include letters, phone calls, and text messages. Some providers even use fake caller ID programs to trick you into answering the phone. Since the loan industry is not regulated, these advances are not subject to the same restrictions on collection practices that keep other creditors from harassing you. They may call you, your landlord, or just about anyone else you know to get you to start repaying your advance.

Your loan provider may offer loan help in the form of lower payments. This assistance may come at a high price to you, though. Although the provider may lower your payments, your debt may still accumulate interest or penalties, costing you much more in the long run. For example, if considering a restructured loan payment plan, review the details carefully or consult a professional, such as a Regroup Partners advisor.

Keep in mind that you could be sued for a loan breach of contract if you choose to remain in default. A loan lawsuit can endanger your business assets, which may eventually lead to closing up shop and filing for bankruptcy. If the loan provider wins the lawsuit, the provider can then collect a judgment, seizing your business cash and other assets to pay off your debt.

We can help you find loan relief, though. It is not too late to seek help, even if facing a lawsuit. Regardless of where you are on your loan journey, we have tailored solutions that can greatly assist you.

At Regroup Partners, we take a personalized approach to loan debt relief. Options typically include:

• Restructuring – We work with your loan provider to find a fair repayment plan that meets your needs.
• Settling – We help you settle with your loan provider for less than the amount you owe, so you have access to a clean slate.
• Consolidating – We connect you with a lender who can consolidate your loan debt and lower your payments.
• Reverse Consolidating – If you do not qualify for consolidation, our advisors can devise a reverse consolidation plan as an effective alternative.

Our advisors follow a three-step process to determine which option will best meet your business needs, both now and in the future. We want you to have secured financial footing and the ability to qualify for traditional business financing products with more favorable terms, including longer repayment periods and lower interest rates. We propose an effective, three-step method toward solid financial ground, which includes loan relief. Our program structure proposes:

1. Consult. Our FREE consultation allows us to assess your situation. We get to know your business, inside and out, so we can provide effective solutions that help you meet your short and long-term business goals. We also take extra time to determine whether or not our program would be a good fit for your needs.
2. Solution Finding. With the assistance of our loan lawyers, who are federally licensed, we find solutions that free up your cash flow. Our advisors and legal experts are at your disposal to determine what makes the most financial sense for your business.
3. Implementation. We work with your loan providers so you can settle, repay, or consolidate your debt, depending on your situation.

There is no reason to hide any longer from your loan debt. Our Regroup Partners advisors are ready to help. Contact us to get started right away!