A merchant cash advance (MCA) can be a fast and easy way to get working capital for your business, but it can often lead to trouble down the line. MCAs can be tough to repay because of their repayment structure and costly fees.

If you’ve borrowed an MCA, you may find yourself stuck in a cycle of debt and struggling to pay it back. If this is your situation, there are some relief options, including seeking the help of an MCA debt advisor, who can help you choose the best course of action.

What is an MCA Debt Advisor and Why Hire One?

An MCA debt advisor is a professional who can help you manage your MCA debt and find debt relief. There are multiple types of debt advisors, including debt settlement firms and debt relief attorneys. While it’s possible to have success with either option, an MCA attorney can often lead to the best results. 

Working with an MCA debt advisor can offer several key benefits. First, it can help you avoid legal action from your MCA provider. As a result, you can protect both your business and personal finances. And if you’re already facing legal action, an MCA debt advisor can help you navigate the process and minimize the negative impacts.

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Even if legal action isn’t a concern, an MCA debt relief professional can help you restructure or negotiate your debt to make it more affordable and easier to repay.

Services Provided by MCA Debt Advisors

There are a few key services debt advisors can help you with to make repaying your merchant cash advance more manageable. These services include debt restructuring and debt settlement.

Debt Restructuring

When you restructure your debt, you change your repayment terms to make it easier to pay back. You can do this directly through your current MCA company or with a different lender altogether. Here are your two primary options:

  • MCA Reconciliation: Many MCA agreements have a reconciliation clause, which allows you to adjust your payments based on certain circumstances. For example, your reconciliation clause may allow you to lower your payments if your business’s revenue declines. As a result, repaying your debt becomes more affordable.
  • MCA Refinancing: Refinancing your MCA debt allows you to get out of your MCA by taking out a new loan to pay off your existing debt. You would then make payments on the new loan instead of your MCA. Ideally, the loan you use to refinance your MCA debt would be a simple, low-interest installment loan with a fixed interest rate and predictable payments.

Both reconciliation and refinancing can make your debt payments more affordable and can minimize the chances of a lawsuit from your lender.

Debt Settlement

Another service an MCA debt advisor can provide is debt settlement. Through debt settlement, you (or your advisor or attorney, on your behalf) would negotiate directly with the MCA lender. The goal of debt settlement is typically to agree to new payment terms or a lower repayment amount. 

For example, if you owe $10,000 on your MCA, an MCA debt relief professional may be able to help you negotiate to pay only $7,500 in a lump sum. You benefit from getting to pay back a lower amount, and your lender benefits from ensuring they’ll get most of their money back.

MCA debt settlement is never a guarantee. It’s always possible your lender may refuse to settle. But you may have a better chance with a debt relief attorney working by your side.

How the MCA Debt Advisory Process Works

The MCA debt advisory process varies depending on the type of professional you’re working with. In most cases, you’ll have an initial financial consultation and debt assessment. In this part of the process, your advisor will go through your debt situation and analyze what other assets and liabilities you have that may affect your ability to repay the debt.

Next, your debt relief advisor will create a personalized debt relief plan based on your situation. Depending on your debt amount and your ability to repay, your personalized strategy may include debt reconciliation, debt refinancing, or debt settlement.

Once you choose a path, the MCA debt relief professional will help you implement the plan you’ve put in place. Keep in mind that MCA providers often shun debt relief agencies and so when making your decision consider an MCA debt help attorney. They may speak with your MCA provider or the collection agency collecting the debt on your behalf or give you the resources to take your next steps. They will also help monitor your progress to make sure you’re going in the right direction and help protect you and your business legally.

How to Choose the Right MCA Debt Advisor

When you’re looking for a professional to help you deal with your MCA debt, it’s important to find someone who has the qualities and credentials you need.

First, make sure the debt advisor you’re considering has the necessary skills and qualifications. Ideally, they would have plenty of years of experience dealing with MCAs and other forms of business debt. They should have a proven track record and plenty of positive client reviews. They should have a level of accountability and education like an MCA debt relief attorney.

Next, consider what credentials they have. There are plenty of debt settlement companies that offer to negotiate with your lender on your behalf. However, it’s usually best to work with an attorney who has experience in this area. Not only can attorneys help you negotiate with your MCA lender, but they can also advise you on a wider variety of options and can represent you if your lender pursues legal action which is common in the MCA world. Not to mention, they’re legally and ethically bound to act in your best interests, where a debt settlement company isn’t.

How to Find a Trusted Advisor

If you’re considering hiring an MCA debt advisor to help you with your financial situation, start by consulting those in your network. Word of mouth is an excellent way to find the best debt professional to work with. If you know any other business owners who have sought debt relief, they may be able to recommend someone. 

If you don’t personally know anyone who can recommend a trusted advisor, consider reading online reviews. It’s important to find someone with a proven track record, and that should include positive reviews from past and current clients.

Once you’ve found a debt relief professional, you can ask questions to make sure they’re the right fit. For example, ask them about their credentials, experience, debt relief strategies, and anything else you need to know to make a decision.

Red Flags and Warning Signs to Avoid

When you’re searching for the right person to advise you on your debt relief journey, there are some red flags to look out for. First, avoid working with anyone who guarantees a certain outcome. No one can promise a successful settlement, time frame or specific outcome in any way and it’s a red flag if they say they can.

Another red flag is a person or company who recommends a one-size-fits-all approach and solicits you. Everyone’s debt situation is different, and the approach they take to your debt should reflect that. Unfortunately, there are many debt settlement companies that recommend debt settlement to every client, even if another solution may be a better fit.

Finally, it’s a red flag if a debt relief professional can’t share client success stories or positive results or they are simply a call center where the work is not actually done by the people you’re speaking with. While they won’t share specific details about their clients, they should be able to explain how they’ve helped clients in the past.

Conclusion: Do You Need an MCA Debt Advisor?

An MCA debt advisor isn’t necessary for every situation, but can make your debt more affordable, help you avoid legal action, or navigate the legal process if you’re being sued by your lender. While there are several types of debt advisors to choose from, including debt settlement companies and debt relief attorneys, working with an attorney can often provide the best results.

Tayne Law has more than two decades of experience and specializes in helping clients resolve their debts. Our team of experienced professionals has extensive experience dealing with MCA debt, and we know how to navigate its complex MCA and business debt matters. If you need help with your MCA debt, call us at (866) 890-7337 or fill out our short contact form to speak to a team member and find out if we’re the right fit.