It's the high-interest loan you took out in a moment of desperation, the predatory line of credit that seemed too good to be true, the convoluted equipment lease that's costing you more than the asset itself.
These seemingly innocuous financial decisions can act like a slow-moving poison, siphoning off your hard-earned revenue and leaving you with less to invest in growth, less to pay your team, and ultimately, less to put in your own pocket.
The allure of quick cash can be strong. A new opportunity arises, a critical piece of equipment breaks down, or a sudden cash flow crunch threatens to derail your operations. In these moments, the first offer that comes your way, regardless of its terms, can look like a lifeline.
But this is where the danger lies.
A bad financing deal doesn't just cost you money in the short term; it creates a long-term drain on your resources. It's a weight that gets heavier with each passing month, forcing you to constantly run faster just to stay in the same place.
This article will be your guide to understanding the various ways bad business financing can eat your profits, and more importantly, how you can avoid these pitfalls and secure a financial foundation that truly supports your business's growth.
We will delve into the different types of bad financing, the warning signs to look out for, and the strategic decisions you can make to ensure your financing works for you, not against you.
Your business is more than just a company; it's a testament to your relentless effort and unwavering vision.
You've fought through countless challenges, from market downturns to unforeseen emergencies.
But there’s a new, more insidious threat lurking in the shadows of the financial world—one that preys on your moments of vulnerability.
This isn't a simple risk; it’s a sophisticated attack.
When cash flow tightens or you face an unexpected setback, predatory lenders see it as an open invitation to seize your hard-earned assets and ultimately dismantle your dream.
Their methods are subtle, their promises are slick, and their contracts are designed to be a financial trap.
Understanding this threat is the first step to defending yourself and securing your business's future.
The time for passive learning is over. This is a call to arms for every business owner.
Short-term Business debt isn't a long-term solution; it's a financial chokehold.
Think about your daily or weekly payments.
They don’t just happen; they actively steal from your business's future.
You’re constantly scrambling, watching every dollar you earn get siphoned off the moment it hits your account.
And what about the interest?
That small percentage on a merchant cash advance or line of credit is a financial mirage. When you calculate the true Annual Percentage Rate (APR), you'll see a number so high it will make your head spin.
This is money that could have been used for a new marketing campaign, a much-needed piece of equipment, or even an emergency fund.
Instead, it’s gone. You're not just paying for money; you’re paying a premium for your own financial instability. This constant stress isn’t just bad for your business; it's eating away at your health, your focus, and your ability to lead. You need to act, and you need to act now.
This guide provides education and awareness about the common practices in the high-cost and short-term business lending market.
It sheds light on complex terms like "factor rates" that can obscure very high Annual Percentage Rates (APRs) and details the risks associated with certain contractual clauses, such as Confessions of Judgment and Uniform Commercial Code (UCC) blanket liens.
It also explains the potential conflicts of interest with some funding brokers, who may be motivated by high commissions to recommend expensive debt over more affordable options like SBA loans and other long-term lenders in the private business credit marketplace.
The consequences of taking on high-cost debt can be severe, leading to cash flow problems, operational strain, and intense stress for business owners.
These challenges are often compounded by a regulatory environment that offers fewer protections for business loans than for consumer loans.
This guide is a resource for building a stronger, more transparent financial future.
For business owners, it offers a toolkit for financial literacy and due diligence.
Through education and constructive solutions, we can empower small businesses to secure the reasonable and helpful capital they need to thrive.
Your phone rings. It’s a creditor, again. Your inbox is full of past-due notices. Panic sets in. In this moment of pure desperation, a seemingly perfect solution appears: a business debt settlement company.
This isn't just a friendly article post; this is a warning.
We're pulling back the curtain on the lies these companies tell, exposing their toxic business model, and showing you exactly how they are setting your business up for a catastrophic failure.
They promise to make your problems disappear, to negotiate a clean slate with your creditors for a fraction of what you owe.
But what they don’t tell you is that this "solution" is often a potential road, or more like a highway, to financial ruin.
This article will explore why business debt settlement companies are, in most cases, a terrible choice for a small business owner struggling with financial issues.
We'll break down their tactics, expose their often-predatory practices, and reveal the real dangers that lie beneath their promises.
FACT: MERCHANT CASH ADVANCES (MCAs) DESTROY BUSINESSES.
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Excerpt from our latest report on the dangers of MCAs…
“…a majority of small businesses have just enough cash flow to pay its operating expenses…
Excerpt from our latest report on the dangers of MCAs…
“…The reason the vicious cycle of MCAs can sustain itself for some period of time is because of one simple word in the industry, “stacking”. MCA “stacking” is to put a second MCA on top of a first MCA
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Visit our post and download our latest FREE FULL MCA REPORT-
“The Critical Dangers of Merchant Cash Advances”
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Solutions are available to get you and your business out of the destructive MCA cycle.
MERCHANT CASH ADVANCE SOLUTIONS:
MCA Debt Refinance-
https://www.kanjorskipartners.com/merchant-cash-advance-refinancing-consolidationMCA Restructuring-
https://www.kanjorskipartners.com/merchant-cash-advance-and-business-debt-restructuring-services
Excerpt from our latest report on the Merchant Cash Advance (MCA) Industry…
MERCHANT CASH ADVANCE (MCA) Receivables Purchase Agreement structure has 6 critical parts which all add up to a HUGE and UNSUSTAINABLE, even predatory cost for this type of expensive and short-term financing:
1) PURCHASE AMOUNT: Amount of future accounts receivables and/or sales deposits purchased
LOWER YOUR PAYMENTS: MERCHANT CASH ADVANCE RESTRUCTURING
Merchant Cash Advance restructuring can be a simple process. Your creditors will not tell you this though.
Avoid bankruptcy. Stop harassing and stressful collection activity. Solve your business’ Merchant Cash Advance (MCA) debt situation.
Restructuring services are provided by New Horizons Restructuring LLC, a Kanjorski Partners related restructuring service entity.
View our FREE white paper report on Merchant Cash Advance (MCA) Restructuring:
“THE CRITICAL DANGERS OF MERCHANT CASH ADVANCES”
Our extensive experience in MCA contract review, accounting reconciliation and our vast knowledge of legal collections throughout the US can help your business potentially get refunds and/or credits from either temporary or permanent over-payments owed to you contractually from the MCA companies.
Construction Contractor - Electrical & Remodeling
MCA Total Balance: $225,595
Total Daily & Weekly MCA Payments Per Month: $48,955
Working Capital Given to Borrower at Closing: $30,000
New Refinanced Term Loan Payment: $14,623
Monthly Debt Service / Cash Flow Savings: $34,332
(plus $30,000 of working capital received at closing)
Small businesses that are struggling with predatory merchant cash advances. Daily and weekly payments and effective APR of 60% up to 200%+ are crushing small businesses across the nation as we post this.
Kanjorski Partners LLC, has been refinancing small businesses across the US and providing additional working capital since Sept 2019.
Refinance of the entire MCA capital stack for a business and refinances it into a term loan resulting in a reduction of total monthly debt service payments by 50% to 90% for small business owners.
We are proud to be a part of an initiative and provide this solution to small businesses to help them deleverage and exit of predatory merchant cash advances positions and restore liquidity and equity to their balance sheet.
$57mm billed charges out-of-network
$13mm billed charges w LOPs in place
$70mm total billed charges
Multi-state and multi-site portfolio
Registrations Process:
1) execute fee agreement / NDA / non-circumvent
2) provide proof of closing funds
3) execute NDA/Conf. Agreement compliant with Health Insurance Portability and Accountability Act of 1996 and Enforcement Rules at 45 CFR Part 160 and Part 164 prior to receiving due diligence data
Bidder registration cutoff Wed, Jan 22nd at 4 PM EST
Indicative Bids due Wed, Jan 29th by 4 PM EST
Email sbernarsky@kanjorskipartners.com for registration
$88mm medical surgery center personal injury claims
All claims have Letter of Protection in place
80-90% auto (MVA); 10-20% slip and fall (Premises advanced at 50% of MVA rates)
Seller is current servicer (winning bidder can stay with current servicer or take over servicing rights)
Bid floor is $19mm (21.5% of Unresolved Receivable)
Must execute NDA and Conf. Agreement compliant with Health Insurance Portability and Accountability Act of 1996 and Enforcement Rules at 45 CFR Part 160 and Part 164 prior to receiving due diligence data
Proof of closing funds due after NDA execution
Forward flow (right of first refusal) on a monthly flow of approx $8 to $10mm (contract available to winning bidder)
Bidder sign up cutoff Monday 11/18/2019 at 4 PM EST
Bids due Thursday 11/21/2019 by 4 PM EST
Contact us for registration information
Kanjorski Partners is pleased to announce the launch of our Small Business Refinance Program focused on refinancing Merchant Cash Advances and other Small Business debt. Below are the general program details:
Pre-Qualification Requirements (answer in 24 to 48 hours):
• Names of all MCA Companies owed
• Total Amount Owed to each MCA company
• Daily Payments to each MCA company
• Status with each MCA company (current, default or currently in seizure/garnishment)
• A current AR aging report
• A current AP aging report / debt schedule
• Interim P/L and Balance Sheet and previous year P/L and Balance Sheet
• Last 12 months of bank statements
• Completed loan application (all listed requirements on last page)
MCA & Business Debt Refinancing General Loan Terms (typically 5 to 10 business days for full underwriting):
• Refinance all of your current merchant cash advances into one monthly or bi-monthly payment
• Save up to 60% on your total current monthly payment amounts
• Re-amortize your advances to a 1 to 3 year amortization and term
• Possible approval for additional working capital at closing
• Loan size (all outstanding advances must total a minimum of $50k up to $1mm; can refinance larger amounts through syndication)
• Anticipated annual interest rate (25% to 30%)
• Anticipated average loan terms (1 to 3 year term with 1 to 3 year amortization)
• Personal & Spousal Guarantees required by all owners with more than 20% interest in Company
• Stock pledge & UCC-1 lien filing
• Sufficient receivable and/or asset coverage for the loan (determined in underwriting)
• End of term refinance program options to renew or qualify for a new operating line of credit or term loan
Visit here to apply:
https://www.kanjorskipartners.com/refinance
Our private and master-serviced nationwide legal collection network will advance court costs to litigate on your legal collection claims.
Place your accounts to one centralized placement point for litigation collection strategy and receive one detailed monthly collection and accounting report.
More information here…
Become our referral partner for helping businesses get loans in the range of $500,000 to $5,000,000
Please contact us here for more information on our referral program:
Revolving Credit Facilities
Term Loans
Senior-Secured Financing
Mezzanine Financing
Interest Rates mid-teens to mid-twenties annualized (pending underwriting and position)
Flexible Terms and Traditional Loan Terms
Facilities can open within 30 days or less from application submission
New loans can sit behind SBA loans in the cap stack
$1mm to $5mm loan sizes
Inquire here: https://www.kanjorskipartners.com/business-loans
(see “Disclaimer” at the bottom of this website)
Kanjorski Partners, LLC can assist consumer debt buyers and collection agencies in refinancing their purchased consumer debt portfolios and with financing for their future purchases.
Eliminate fixed monthly payment amortization and remit monthly on a gross cash flow percentage basis.
Both equity and debt financing structures are available for refinancing existing purchases or for financing new purchases.
For a FREE portfolio appraisal and a quote for financing or refinancing, contact us today to setup a consultation.
SELL YOUR CONSUMER DEBT JUDGMENT ACCOUNTS
Our consumer debt purchasing clients are seeking judgment portfolios for acquisition.
Consumer debt judgments (credit card, consumer loans, auto loans, etc).
Older judgments, dormant judgments and any size is OK.
Please contact us if you have consumer debt judgment portfolios for sale.
Bernarsky Partners recently entered into a monthly service agreement with a collection law firm for payer identification and account scoring services of all existing and newly placed inventory.
Chance of Collection (tm), our payer identification scoring model is able to identify which defaulted, charged off or judgment accounts will pay in the future. Our collection law firm client uses the Chance of Collection (tm) model to determine which newly placed accounts go to the top of the workflow pile for their attorneys and paralegals to begin reviewing and processing.
We also reviewed all dormant judgment accounts in the law firm’s inventory to determine the most profitable course of action for post judgment remedies by identifying which judgments have the highest propensity to pay.
Here is a white paper on our Chance of Collection (tm) analytics model services
Bernarsky Partners recently assisted a subrogation, collection and creditor rights law firm in reviewing their dormant judgment inventory. Chance of Collection (tm), our proprietary analytics model, was able to identify concentrated and specific portions of the total creditor judgment inventory out of a large pool of dormant judgments that will pay in the near future. Our Chance of Collection (tm) model also identified assets such as bank accounts, brokerage accounts, other personal property and places of employment to aid in post-judgment executions and remedies.
This dormant judgment inventory review has enabled our client, the collection law firm, to focus their resources and production time specifically on the judgment accounts that will produce maximum fee revenue and net back to their clients.
Here is a white paper on our Chance of Collection (tm) analytics model services
Bernarsky Partners, LLC announces its exclusive agreement with “Chance of Collection” (tm), a proprietary predictive algorithmic scoring model that identifies accounts in a defaulted or charged off status that have a high propensity to pay.
The “Chance of Collection” (tm) scoring model is customized client-by-client to produce results through back tested, predictive analytics in the following areas:
(1) COLLECTION AGENCIES- prioritizes accounts by propensity to pay, estimated percentage of payment in each score tranche and also estimated amount and/or term of payments to be expected; increases profitability and efficiency by enabling a collection agency to work less accounts and collect more for their clients
(2) CREDITORS- identifies delinquent accounts that have the highest propensity to “cure” prior to charge off as well as which accounts to keep internally and which accounts to outsource/sell; segments accounts by propensity to fall into delinquency; identifies accounts that are in danger of future bankruptcy; provides recommendations on which accounts to send to litigation with the highest chance of recovery to produce optimal net charge off rates for credit issuers
(3) COLLECTION LAW FIRMS- identifies which accounts in the paralegal’s queue to pursue first for litigation; pinpoints specifically which judgments to focus on monetizing and provides judgment debtor asset information as well as place of employment for judgment execution
Download an overview from the link below of how the “Chance of Collection” (tm) scoring model works:
Bernarsky Partners LLC has secured a $100mm senior credit facility for one of our clients to purchase semi-performing and non-performing defaulted consumer credit receivables assets. We sourced this credit facility for our client from our network of alternative asset finance and capital partners.
Bernarsky Partners LLC is also contracted to source, analyze and price assets for acquisition with this revolving senior credit facility.
Business Finance & Strategy Advisors
Refinance. Restructure. Reorganize.
Help with Business Debt, Loans and Merchant Cash Advance (MCA)
