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Your Financing Options: Loans vs. MCA loan

Understanding Your Financing Options: Loans vs. MCA Loans

Choosing the right financing option for your business is crucial. This article explores the two main options, traditional loans and merchant cash advances (MCAs), highlighting their key differences to help you make an informed decision.

The Real Cost:

  • Traditional Loans: You borrow money and pay interest on the remaining balance. You may save by paying early.
  • MCA Loans: You sell a portion of your future sales to an MCA company at a factor rate, which acts like interest. Early repayment doesn’t save you money.

Repayment:

  • Traditional Loans: Fixed monthly payments over a set term.
  • MCA Loans: Daily or weekly withdrawals from your business’s bank account until the merchant cash advance is fully repaid.

Key Differences:

Choosing the Right Option for you:

While MCAs offer quick access to funds, their high cost and lack of transparency make them a last resort. Traditional loans, despite a potentially longer application process, are generally the more affordable and predictable option.

I Already Have a MCA for My Business — What are my options?

If your business is already feeling trapped in a merchant cash advance, having access to consult with a seasoned attorney can often provide clarity and a path toward financial recovery.  Legal professionals experienced in handling MCAs can offer strategic direction, legal advice, and support for navigating the complexities of these agreements. Coastal Debt Resolve specializes in reducing our clients’ business debt by providing expert negotiations, transparency, care, and consistency, and giving them the opportunity to experience the financial stability they deserve.  Schedule your free consultation today!