Business Debt: Good Debt vs. Bad Debt
When is more Business Debt a Bad Idea?
When is more Business Debt a Bad Idea?
Here are a few reasons you may not want to take on more business debt:
Repayment: When you take on business debt, it has to be repaid in full with interest or financing charges…
Business Debt: How Much Is Too Much?
Business Debt: How Much Is Too Much?
Running a small business can take a lot of time and money, which is why many entrepreneurs leverage debt in the beginning.
Debt can be a useful tool to start your business, but make sure your debt is working for you, not against you.
Is Business Profit more Important than Cash Flow?
“Never take your eyes off the cash flow because it's the lifeblood of business.”
Is Business Profit more Important than Cash Flow?
Both profitability (P&L) and its cash flow (income statement) are important to a business.
Effects of Business Debt and Cash Flow Issues
Effects of Cash Flow Problems on Businesses
When Business Cash Flow is strained, it can impact and damage businesses.
Signs of Business Cash Flow Problems
“An early warning sign of a cash flow problem is when your business revenue is fluctuating or has recently fluctuated by about 20 percent.”
"Later state warning signs include NSF (not sufficient funds), a series of missed or nearly missed payrolls and accounts payable (AP) vendors that put you on credit hold."
Business Profit vs Cash Flow: Understand the Difference
"Business debt payments can cause cash flow problems when a business can no longer afford its financing."
Profit vs. cash flow: Understand the Difference
Business Debt and Cash Flow Issues?
"Business debt payments can cause cash flow problems when a business can no longer afford its financing."
Restructure and Refinance Business Debt + Merchant Cash Advance (MCA) Loans
Business Debt + Merchant Cash Advance (MCA)
REFINANCE
1. Submit a Quick Qualifier (1 minute or less)
2. Complete Application and Upload Supporting Documents (5 to 10-minutes or less)
3. Receive Determination (1 to 2-business days)
RESTRUCTURE
Business Debt + Merchant Cash Advance (MCA)
1. Submit your Restructuring Inquiry
2. Speak with one of our Restructuring experts
3. Engage with our Business Debt Restructuring team to modify your business debt
Steps to Refinance & Consolidate Business Debt + Merchant Cash Advance (MCA) Loans into One Payment
6 Easy Steps to Refinance & Consolidate Business Debt + Merchant Cash Advance (MCA) Loans:
1. Submit a Quick Qualifier (1 minute or less)
2. Complete Application and Upload Supporting Documents (5 to 10-minutes or less)
3. Receive Determination (1 to 2-business days)
4. Create Credit Package with our underwriting team for presentation to our inventors
5. OPTION 1: Short-term Refinance for “MCA Relief” (3 to 5-business days to close; 12 to 18-
month term); [18% to 28% APR or 1.18 to 1.28x factor over 12 to 18-months]
6. OPTION 2: Long-term Full Refinance of all Business Debt + MCAs (3 to 4-weeks to close; 24 to
60-month term loan with one monthly payment); [14% to 19% APR + closing & legal fees on a 24 to 60-month term]
Why Refinance and Consolidate Business Debt?
Benefits of Refinancing & Consolidating Business Debt + Merchant Cash Advance (MCA) loans include:
One monthly payment
Fixed interest rate
One lender
Flexible terms
Working capital
Debt Refinancing consolidation is the process of replacing multiple loans with one single loan. This reduces the number of creditors you are paying by consolidating your debts into one payment through a single lender.
1-Minute or Less Qualification for Business Debt & Merchant Cash Advance (MCA) Refinancing
1-Minute or Less Qualification for Business Debt & Merchant Cash Advance (MCA) Refinancing
Payoff all Business Debt & Merchant Cash Advance MCA debt to a term loan
One monthly payment on a 24 to 60-month term loan
All business debt paid off to a $0 balance at closing
Interest rates 14% to 18% (plus closing costs, PIK and legal fees)
Short-term Refinance (12 to 18-month term loan) can close in 3 to 5-business days
Long-term Refinance (24 to 60-month term loan) can close in 3 to 4-weeks
Working capital is available at closing in Refinance consolidation transactions
A new, on-going relationship with a Capital Partner (not just a one-time transaction)
Interest-only for 6 to 9-months after closing is available
Reconcile your Merchant Cash Advance MCA contract and payments
Reconcile your Merchant Cash Advance MCA contract and payments
HAVE YOU RECONCILED YOUR PAST AND FUTURE MCA CONTRACT PAYMENTS?
Over payments on your MCA contract(s) may be present right now.
Your business may be owed over payment credits or refunds.
YOU MAY BE OWED MONEY FROM MERCHANT CASH ADVANCE MCA COMPANIES!
Stop taking MCAs.
STOP TAKING MERCHANT CASH ADVANCE (MCA)!
MCA-taking allows MCA companies to steal your top-line sales.
When you take an MCA, the “factor” rate that you pay is directly related to the amount of top line sales that you are giving away.
$100,000 MCA at 1.38x “factor rate” is the SAME AS IMMEDIATELY GIVING AWAY $38,000.
That is why you don’t have enough cash flow.
That is why you cannot afford the daily or weekly payments.
DEAL TABLE: $1,370,000 IN MCA LOANS REFINANCED & PAID OFF + $750,000 IN WORKING CAPITAL
DEAL TABLE: $1,370,000 IN MCA LOANS PAID OFF TO A SHORT-TERM (18-MONTH) “MCA RELIEF” REFINANCE + $750,000 IN WORKING CAPITAL
SaaS and I.T. Cloud Services Company with Merchant Cash Advance MCA loans and other high-interest, short-term debt totaling ~$1,370,000.
The Company was paying ~$197,072 Total in monthly payments to MCA companies and short-term debt providers.
At closing, all MCAs were paid off for a discounted amount and zero-balance letters (ZBLs) were issued to the Company from the MCA loan companies.
The Company’s new TOTAL monthly payment is now $79,500 (payment reduction of over 60%, down from $197,072), and company was given $750,000 of working capital at closing.
HOW DO MERCHANT CASH ADVANCE (“MCA”) LOANS DESTROY GOOD, PROFITABLE SMALL BUSINESSES?
HOW DO MERCHANT CASH ADVANCE (“MCA”) LOANS DESTROY GOOD, PROFITABLE SMALL BUSINESSES?
Cost of Capital
It’s is extremely important to understand the true Cost of Capital when you are considering taking on any type of business debt financing.
This is the #1 reason that MCA loans destroy good, profitable businesses since MCA loan’s Cost of Capital is extremely high compared to all other business debt financing options.
DEAL TABLE: $500,000 IN MCA LOANS PAID OFF + $100,000 IN WORKING CAPITAL
DEAL TABLE: $500,000 IN MCA LOANS PAID OFF TO A SHORT-TERM (18-MONTH) MCA RELIEF REFINANCE + $100,000 IN WORKING CAPITAL
Real Estate Management Company with Merchant Cash Advance MCA loans and other high-interest, short-term debt totaling ~$500,000.
The Company was paying ~$134,972 total monthly payments to MCA companies and short-term debt providers.
At closing, all MCAs were paid off for a discounted amount and zero-balance letters (ZBLs) were issued to the Company from the MCA loan companies.
The Company’s new total monthly payment is now $64,000 (payment reduction of over 52%, down from $134,972), and company was given $100,000 of working capital at closing.
DEAL TABLE: $900,000 IN MCA LOANS PAID OFF TO A LONG-TERM LOAN + $500,000 IN WORKING CAPITAL
DEAL TABLE: $900,000 IN MCA LOANS PAID OFF TO A LONG-TERM LOAN + $500,000 IN WORKING CAPITAL
General Contractor and Builder with Merchant Cash Advance MCA loans and other high-interest, short-term debt totaling $900,000.
The Company was paying $123,842 total monthly payments to MCA companies and short-term debt providers.
At closing, all MCAs were paid off for a discounted amount and zero-balance letters (ZBLs) were issued to the Company from the MCA loan companies.
The Company’s new total monthly payment is now $48,612 (payment reduction of over 60%, down from $123,842), and they were given $500,000 of working capital at closing.
How Merchant Cash Advance MCA Loan Refinancing and Consolidation Works
Merchant Cash Advance MCA refinance and consolidation pays off all your MCAs to a zero balance and stretched your business debt over a longer period, therefore lowering your total monthly debt payments by 50% to 90%+.
We always prefer to hear more details of your business financing situation and goals, now and in the future, prior to making specific recommendations. Please book a consultation call here —>
Kanjorski Partners LLC’s consultants and advisors are equipped to handle most any MCA stressed and/or distressed situations.
Generally we have two types of MCA refinance programs and processes:
1) Short-term MCA Relief (Payoff and Consolidation to a Longer Term)
3 to 5-business-day process (app to closing) for MCA payment relief and working capital
MCAs paid off to a zero balance at closing and UCC removed
Cost of capital ranges from 18% to 28% (pending underwriting risk assessment)
Weekly or Bi-weekly payment options (determined in underwriting)
12 to 18-month term (pending underwriting)
Reduce your total monthly debt service payments by 50% to 60%
2) Long-term Full Refinance (Payoff and Refinance all business debt to a Longer Term)
Full refinance and payoff of all business debt (will leave a bank, SBA or AR factoring relationship in place)
3 to 4-week process (app to closing) for a full refinance (recap) of all business debt
Working capital provided at closing (determined in underwriting)
One monthly payment
2 to 3-year term (and in some cases and industries, 5 to 7-year+ or longer)
SBIC, private equity and investment banking is also available for special situations
MCAs paid off to a zero balance at closing and UCC removed
Cost of capital ranges from 12% to 18% (pending underwriting)
Monthly payment is principal and interest
Interest only (IO) “relief” period for 6 to 9-months after closing
Reduce your total monthly debt service payments by 60% to 90%
