American Finasco > Blog > Are MCAs helpful during this pandemic?

Is an MCA helpful to my business during this pandemic?

Covid-19 has continued to have a devastating effect on many small businesses. Since the recession, small businesses have had trouble getting loans. Many have turned to a Merchant Cash Advance Loans for working capital to survive. Although American Finasco does not advise their customers to seek an MCA (Merchant Cash Advance) loan, if you have found yourself in this similar situation, there are a few things to know.

Yes! A merchant cash advance is an attractive offer! Promises of lightning fast approval and easy qualification – even with bad credit. At the same time, this can leave you stuck with a high interest rate and hidden fees.

If a business is closed due to the COVID-19 emergency, an MCA company is not entitled to any payments. This is true even if the contract requires a business to wait 30 days and then request a reconciliation. In these types of circumstances, failure to make payments should not be considered a default under an MCA contract.

It is unlikely that your MCA (Merchant Cash Advance) contract addresses a pandemic. However, the merchant must keep in mind that payment is due subject to a percentage of the company’s debit and credit card transactions. If income has ceased for the small business, it is unreasonable to expect payments, especially from a non-essential business.

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 MCA 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 Contact Us and complete our Online Form for a free consultation or call (800) 299-2909. We look forward to speaking with you.