Merchant cash advance loans are often seen as a great way for a business to get a little bit of cash to keep them afloat when they’re going through a rough spot. While this may be true, there are downsides to merchant cash advance loans as well, like the potential for a merchant cash advance default. Before getting one, small business owners may want to consider the pros and cons to make sure it is a good option for their business.

Get Money Fast
MCA's are a way for business owners to get money fast. The application is usually simple, and the money can be given to the business owner in just a few days. Business owners can request the amount of money they need to stay afloat or to help the business expand, depending on the reason for the loan request.

Money Still Due, Even When Income is Low
In most cases, the merchant cash advance loan won’t be flexible as far as repayments go. The daily, weekly, or monthly amount due will be the same amount every period until the loan is repaid, even if the business goes through another low spot. If the business is struggling and the owner cannot pay the loan, they may end up facing a merchant cash advance breach of contract and may need to hire an MCA attorney to help them get out of default and fix the issue.
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No Collateral Needed
With these loans, there’s no need for collateral, so it’s easy for just about any business owner to obtain a merchant cash advance loan. They will need to go through the application process, but it is highly likely the business owner will be approved for a loan and will be able to get the cash advance they need for the business.

Potential Risks of Default
The biggest downside to these loans is what happens if there is a default on the loan. If the business owner can’t pay, they could face a frozen bank account as well as a bank levy or bank restraints. Along with the potential for bank levies, they could face UCC liens and other issues. This will not go away, and they will still owe the original amount of the loan, as well as all of the interest and other penalties.

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If you are considering a merchant cash advance loan, make sure you understand the benefits as well as the risks. If you have already received a loan and you’re worried about defaulting, contact a merchant cash advance lawyer for help right away. They can help you take care of the merchant cash advance legal issues as well as provide advice for moving forward. 

 
No business in America escaped the effects of the global pandemic. Unemployment skyrocketed, consumer confidence dropped, and the GDP contracted. Experts anticipate the country will feel the effects of the pandemic for years to come, and nobody can predict the obstacles business owners might still face.

Saving Funds
Merchant cash advance companies quickly discovered many clients could not make their payments as agreed. They witnessed the detrimental effects of the pandemic sooner than most other businesses today. Their clients opted to prioritize debts and save their cash, hoping to save their business in a time of uncertainty. The MCAs weren’t affected, as they automate the payments. Nevertheless, they did witness a decline in payments in the months of March, April, and May, and this trend continues today. Fortunately, attorneys work with clients who find they are in this difficult situation, which also helps MCAs.

Modification Requests
Many clients called and requested modifications to avoid collection activities. Small business owners wish to avoid merchant cash advance legal issues, bank restraints, frozen bank accounts, and more. Fortunately, MCAs wanted to avoid taking actions such as these. They recognized a merchant cash advance default hurt their business as well because it would force them to take legal action. Pursuing bank levies, UCC liens, and things of that nature take time away from their businesses. As a result, they have been willing to work with clients or a client’s merchant cash advance attorney to avoid a merchant cash advance breach of contract.MCA Defense

Helping Clients in Need
Fortunately, merchant cash advance providers find they have opportunities to help business owners during this troublesome time. While the government stepped in and attempted to help small businesses across the country, bureaucracies work slowly, and many business owners found they needed funds before the government could provide them. Banks helped corporations get the funds they needed to continue operations, but overlooked small business owners when doing so. This is where merchant cash advance providers stepped in to help. Some companies borrowed money at that time only to discover the pandemic lasted longer than they anticipated and they can’t repay the funds. Merchant cash advance attorneys help clients work out an arrangement with the MCA to resolve the issue.

Time is of the Essence
Business owners find merchant cash advance businesses help companies in need of funds and do so rapidly. Often, these business owners find they have funds in hand in a matter of days. Small business owners remain the backbone of the American economy, and small businesses make up 45 percent of the country’s GDP, with the majority employing less than 20 workers. Merchant cash advance businesses stand ready to help these companies during this tough time. Unemployment numbers are on the decline, many states appear to be getting control of the virus, and the economy looks like it is rebounding. The funds provided by these providers help business owners make it over the hump and get back on their feet once again where they belong. When a business owner uses this service and finds they cannot pay as agreed, merchant cash attorneys can be of assistance. They work with clients and MCAs to reach an agreement that is favorable to all. 

If you are experiencing difficulty keeping up with your current MCA obligation or have fallen behind on any other business loans MCA Defense Now can help. Please contact us today for your free consultation.