How to Pay Off Your Merchant Cash Advance (MCA) Loan
If you are looking for a solution to get out of your working capital loan, we have a new creative funding solution that might be able to help!
Many business owners have recently obtained Merchant Cash Advance loans (MCA). They’re also referred to as short-term business loans, work capital loans, and business cash advance loans. The majority of these types of loans require the business to make daily payments, which can sometimes be difficult for business owners to keep up with.
MCA loans are great if you’re looking to obtain a quick infusion of working capital to the business. However, we understand things might change with your business and you may not be able to service the daily payments any longer. If you are experiencing a decrease in revenue, you are probably already aware that you won’t be able to qualify for additional funding with your current lender. But there’s still a solution! The program we have available allows you to use additional collateral to obtain capital to payoff that debt and possibly obtain additional working capital!
Here’s How It Works
This is not your typical working capital program.
Typically, when trying to obtain additional funds, you would need to provide proof of income. This could be with providing bank statements for the last 6 months or tax returns for the business. But you don’t need those thing to qualify for our program.
With First Capital’s working capital program, you just need to pledge collateral to qualify.
To qualify, you will need to pledge additional collateral. This includes things like
- heavy equipment
- titled equipment
- manufacturing equipment
- real property
Even if the real property is partially encumbered, we still might be able to find a way to make it work! We will still review bank statements, but it’s not to ensure profitability and cash flow of the business.
What type of collateral are we looking for?
For this program, the collateral to be considered must be a hard asset or real estate.Hard assets can consist of the following:
- Construction Equipment (Yellow Iron)
- Agriculture Equipment (Farming)
- Titled: Class 8 Trucks, Vocational Trucks, Trailers, Vans, Etc.
- Manufacturing Equipment
- Fabricating Equipment
- Machine Shop Equipment
If you don’t have other equipment that you can pledge as collateral, you can also pledge real estate. Even if the property is encumbered with liens, we can still consider the property if the proper amount of equity is within the deal.
Here are just a few examples of business owners using their collateral to help their business:
$200,000 for a Full-Service Marketing & Design Company with IRS Tax Liens and High-Cost Debt
Due to some slow receivables and shift in business model, this debtor had taken on about $100k of costly cash advance debt and fallen behind on about $65k of tax liens. They were able to put a second lien on the principal’s residence, pay off the debt and obtain additional working capital. Not only did the debt get paid off and obtained addition capital, the business owner was able to save about $15,000 a month! That’s $15,000 more to use for his business, every month!
Over $450,000 for Restaurant Expansion & Buildout
After 20 years of operating in the same space, the client’s landlord decided to triple their rent causing a tremendous drain on their cash flow. The client opted to move to a new location, requiring funds towards build out and equipment financing. The client was able to make this transaction work by allowing a second lien position on a condo the owner has for $235k toward buildout expenses plus another $250k for his equipment acquisition financing.
$40,000 for an Owner-Operator Trucking Business
This experienced long haul owner-operator had a horrible breakdown with his older model truck and after recovering from a recent surgery, was ready to get on the road. He did not have a sufficient down payment for the truck he wanted, so he allowed a lien on his mobile home property in Florida.
$200,000 for a Funeral Home Behind a $1.7MM 1st Trust Deed
This client was working on obtaining an SBA takeout loan. The client was able to bridge the gap and received additional working capital to repair the cremation oven, and update their location.
Get Pre-Qualified for Refinancing with First Capital’s Working Capital Program Today!
These are just a few examples on how other business owners have used this program to pay off their existing MCA loans, or to obtain addition working capital or equipment by using their existing collateral. If you would like to get more information on how you can possibly qualify for this program or any of our other programs, feel free to call 888-615-7623 and speak to one of our friendly advisers.
How to Refinance Your Working Capital MCA Loan | First Capital Business Finance