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Debt Settlement vs. Merchant Cash Advance Loans

When debt starts to creep up and lawsuits begin to roll in, your business will suffer. What many business owners do not realize is that there are other options to debt relief besides bankruptcy. After all, nobody wins after you file for bankruptcy. Two very common options are Debt Settlement and Merchant Cash Advance loans. Although they may seem similar, the two are quite different.

Debt settlement: Is an agreement made between a consumer and creditor in which the debt balance is reduced and/or fees are waived, typically at a lower amount than the original debt. You then pay the reduced balance in a lump sum or over time in monthly payments. This service allows third-party companies, like American Finasco to reduce your debt by negotiating a settlement between you and your creditor. A business debt settlement can even keep a business owner’s record clear for loans they may want to obtain in the future.

Merchant Cash Advance: This is when a financing company advances your business cash in exchange for a percentage of your daily profits, plus a fee. Although it is a quick and easy option to get immediate and much needed funds for your business, these cash advances can carry extremely high fees with APR’s in the triple digits! Also, there is no benefit if you repay the advance early. Since you are obligated to repay with a fixed amount of fees, you do not save on interest for early repayment. You can even get hit with an early repayment penalty.

American Finasco prefers to work with businesses before they take out a Merchant Cash Advance. Often, however, business owners call upon American Finasco to settle with the lender once they can no longer keep up with the Merchant Cash Advance payment terms. American Finasco has several options to reduce your commercial debt which allows you to stay focused on your business. We provide strategies and take the pressure off business owners who are having a hard time managing their debt. The first step when dealing with creditors is a phone call to American Finasco. We provide our clients effective solutions for business debt relief. Contact us today to get your business on the right track! Visit our Contact Us page and complete our short form for a free consultation. We look forward to speaking with you.