Some DOs and DO NOTs of Business Debt
“Applying for Business financing and loans, and then managing them, can be a stressful process.”
How to Reduce Business Debt Leverage
How to Reduce Business Debt (Leverage)
“Leverage amplifies risk. So ideally, that risk should be paired with nearly guaranteed future profits.”
The more leveraged your business is, or the more debt that it has compared to top line annual revenue (or expected annual revenue), then the more cash flow fluctuations can disrupt cash flow drastically and strain an already leveraged business.
Business Debt Problems? We have Solutions for you.
“There is really only one way to address business debt issues and cash flow crunches, and it is planning so you can prevent them in advance.”
Solutions for Business Debt and Cash Flow Issues
Here are some ways businesses can dig out of debt when cash flow is constricted and credit markets are tight (increased interest rates):
Cut Unnecessary Costs and Free up Cash Flow…(continued)
Alternative Options to High-Cost, Short-Term Business Debt Financing
"Business Debt is like any other trap, easy enough to get into, but hard enough to get out of."
Alternatives to High-Cost,
Short-Term Business Debt Financing Options
The high-cost and short-term repayment period of a Merchant Cash Advance MCA or similar business financing product creates cash flow issues so you may want to consider more reasonable business financing options.
There are several types of traditional bank loans or alternative financing options to consider.
More diverse loan options are available in the bank and non-bank lending marketplace…
Business Debt Restructuring Defined
"Owing money has never concerned me, so long as I know where it could be repaid."
BUSINESS DEBT RESTRUCTURING DEFINED
Debt Restructuring is a process that allows a company facing cash flow problems and financial distress to reduce and renegotiate its debts to improve or restore liquidity (cash) so that it can continue its operations…
Lenders vs "Funders": Predatory Lending Signs to Watch Out For
“If your mom asks how many eggs you want and you say ‘One’ and she makes you two and you eat both…
Who is better at math?”
RESPONSIBLE LENDERS
There's a reason that responsible lenders want you to show them that you can handle money before they are willing to lend it to you, without all the fees and high interest rates they use to mitigate risk.
PREDATORY LENDER SIGNS
Predatory lending is any lending practice that imposes unfair and abusive loan terms on borrowers, including:
Some Myths About Business Debt
“If you would know the value of money, try to borrow some.”
Some Myths About Business Debt:
Myth 1: "I need to borrow money to start or expand my business."
Truth 1: You can run your business without debt. It takes patience and the guts to do things differently.
Most business owners wonder, How can I fund my business without borrowing money?2
Expand your business gradually and move at the speed of cash to lower your financial risk and minimize the impact from the mistakes you’ll make as you grow and learn.
Moving at the speed of cash has another advantage too: It helps you pause and think.
Using cash assets from your account activates the pain center in your brain so you’re more likely to question whether you really need to purchase that next item and all the company debt that comes with it….(continued)
Warning Signs of Business Debt and Cash Flow Issues
Warning Signs of Business Debt and Cash Flow Issues
"An early warning sign of a cash flow problem is when your business revenue is about to fluctuate or recently has fluctuated by about 20 percent."
"Later state warning signs include NSF (not sufficient funds), a series of missed or nearly missed payrolls and vendors that put you on hold."
Business Debt: Good Debt vs. Bad Debt
When is more Business Debt a Bad Idea?
“Debt is a necessary part of any business journey. By taking loans or seeking financing, you’re giving your company the fuel it needs to grow. The key, however, is understanding debt, healthy loan practices, and the difference between financing that can result in explosive growth and the kind that cripples your business.”
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]