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Don’t Fall for Business Debt Settlement Scams

As the business cash advance industry grows and becomes more “mainstream,” we’ve seen more and more shady companies trying to trick business owners with promises of debt settlement. Over the summer, some of the most well known of these companies’ were exposed in a very NSFW story that revealed how disreputable and unprofessional these debt relief companies can be.

The news got a lot worse for phony “debt relief” companies this week, as two of the largest cash advance companies in the unsecured lending industry, Yellowstone Capital and Everest Business Funding, jointly sued several debt settlement companies, as well as several cash advance brokers, for allegedly conspiring to sell business owners cash advances and then referring them to debt settlement companies that induced merchants to default.

While the consequences of these scandals are not fully known yet, the details of these issues are consistent with the way businesses that claim they can settle cash advance debts operate. In fact, they aren’t much different than debt settlement operations that claim they can settle personal debts, or even the infamous “loan modifications” that were offered during the financial crisis to help homeowner’s negotiate their underwater mortgages.

First, they attract business owners with high interest advances with promises that they won’t really need to fulfill repayment. They will advise merchants to stop paying their cash advances, and to start sending payments to a debt relief company, that they will supposedly negotiate a settlement amount with the cash advance lender.

But cash advance companies simply don’t work that way. The overwhelming majority of unsecured lenders do not allow for these type of settlements, and in most cases, the money sent to debt settlement companies is not nearly enough to repay these debts, even if they were used for that purpose. Merchants will also likely find out that it may be years before they will ever qualify again for any type of financing for their business because of dealing with these debt relief scams.

Now, many lenders are fighting back as extremely aggressive debt settlement firms threaten to trick their clients into insolvency. And here at Main Street Finance Group, we always advise our clients not to deal with these predatory finance companies that lend with one hand and defraud with the other. While unsecured online lending has gotten bigger and bigger, good advise is still very hard to come by. That’s why its so important for small business owners to vet and research people who approach them, offering them deals that sound too good to be true. Your businesses’ future is too important.

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Why Traditional Lenders Are Not An Option For Business Cash Advance

 

There is no dearth of banks and traditional financial institutions and they have a plethora of loans to offer. However, most of their loans are for conventional purchases or investments. They don’t really factor in the possibility of making unique investments that are specific to an industry or pertaining to a singular purpose for a business. When we talk about corporate loans or business loans, we are mostly looking at procuring large equipment or investing in a massive infrastructure that the banks or traditional lenders can relate to, what they will find viable and can see their loaned amount to be safely parked in assets that they can easily liquidate or dispose off should the need arise.

Not every business loan is for the larger infrastructure or to procure the quintessential equipment.

A business cash advance could be an interim financial aid to steer through a crisis. A business cash advance could be to invest in a supplementary solution, which could be hardware or software. There cannot be a cap on the types or the purposes of business loan as that would be futile for companies looking for the much needed financial assistance.

Traditional lenders do not see much sense in considering applications for small loan amounts over very short terms. The extensive application process, the stringent approval and the long drawn loan disbursal make it less rewarding. Most banks are willing to assist large companies with a fortune as a business loan but would not consider business cash advance applications from small firms and medium enterprises. There isn’t enough return for the banks. It is unsurprising why banks have such an approach, given the much higher overhead, the portfolio to manage and the obvious quest for higher returns.

That is where Main Street Finance Group becomes relevant. In a rapidly changing world, it is only expected that businesses will undergo tectonic shifts, new businesses will emerge and the startup scene has already transformed the way business is done. Traditional lenders fail to understand the kind of business cash advance such organisations need, they fail to relate to the viability of such a business loan and hence do not really feel inclined to expand their programs or accommodate apparently quaint purposes according to what they are accustomed with.

Main Street Finance Group understands and relates to the purposes, the nature of expenses and how small to medium businesses are trying to achieve their goals. That lays at the crux of why getting a business cash advance from MSFG is so simple and more surefire.

 

 

 

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Is My Business Eligible For Cash Advance?

“Is my business eligible for cash advance?” This is certainly a fair enough question to ask. You want to know for certain that your business can quality for a cash advance business loan. You want to be absolutely certain that your business cash advance is going to be at a reasonable rate. At the same time, you also want a small business loan that is going to give you the end result you are looking for.

 

Finally, to be sure, you may also need to look into the possibility of a business cash advance bad credit. This brings a whole other set of considerations to the table. All of these questions and needs fuel the larger question of “Is my business eligible for cash advance?”

 

On all of these points, it stands to reason that you’re going to love the end result.

 

Your Business Is Eligible For Cash Advance

Let’s make one thing abundantly clear: When it comes to a cash advance business loan, your business almost certainly qualifies. The business cash advance bad credit solution is a legitimate one. In other words, even if you have bad credit, you can qualify for one of these essential loans. More to the point, you can get one of these loans in hardly any time at all.

 

It is also important to keep in mind that this small business loan is reliable. It also represents an extremely straightforward process. When it comes to get the loan you require for your business, the main requirement involves the revenue of your business. This is the main element that will be considered, in terms of your business cash advance loan. You can be approved for the loan in a matter of just a few moments. You can be approved for the loan on the strength of only the bare minimum in personal information. You will find yourself dealing with straightforward terms, when it comes to paying the loan back on time.

 

Now that you know you qualify, the benefits become that much more attractive. A cash advance business loan allows you to focus on more important things. It gives you the ability to keep your business afloat through a momentary difficult pause. You have plans for the future. You just need a little capital to keep you going. To that end, you are definitely going to want to consider all of the benefits of a business cash advance bad credit loan. You will be glad you did.

 

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Regarding Resources for the Small Business Community

Small Business Resources

I visit local small businesses every day. So I am often having conversations with small business owners in my community and seeing what it is like from their perspective. They tend to have a few things in common; 20 employees or less, fairly new, and lots of long, unpaid hours for the owners.

They also have another thing in common, which is poor access to business credit. They are usually renting, they use credit cards to pay business expenses, and they lose money on their taxes. Most business owners I know go into work every day knowing that one equipment failure or bad decision could close their doors, and that there wouldn’t be anyone willing to save them.

Few, if any of them, receive financing or credit through traditional banks, or have assets with equity in them. What they usually get is advances through “alternative” or “online” lenders. Sometimes they are advances on future credit card receivables, sometimes they are unsecured term loans.

There are a lot of stories about negative experiences with online lending products like merchant cash advances. Most of the business owners I know in South Florida find them to be very helpful. They are able to funds in times and situations where no one else would help them. Most cash advances actually have reasonable, affordable payments from lenders that offer good customer support. They can usually either pay the advance to maturity, or go back and get more funds after a few months of making payments.

Small business owners always have to be smart and vigilant in protecting their business’ financial future. They need to have other options in building revenue for their business. They need to be careful not to over-leverage their business credit through cash advances, or credit cards, and so on. There are thousands of businesses who are able to use unsecured credit options responsibly and successfully.

As long as business owners are smart, like the ones I talk to every day, they can manage things like business cash advances and come out much better from it.

Strategies for Small Business Financing

Having a strategy for finances is very important. When a business owner simply waits until there is an emergency to get a loan, and then puts their finances back out of their mind until next time, problems can arise.

Merchants generally need to have an idea about how they are going to increase their access to credit over time. Even if they get a small, short-term advance, they also need to look ahead. Credit scores can be very important – merchants should always be thinking of small ways to improve their credit rating, including going through a credit repair process if need be.

If a business has taken on a lot of short-term debt, there needs to be a plan to eventually replace them with a better loan product. Merchant cash advances need to be paid off or consolidated at some point. Otherwise it is difficult to move towards longer and larger term loans. Credit lines are something else to look towards.

And even if access to traditional loans is impossible in the near future, merchants need to have a plan to get one eventually. Even longer-term debts and revolving credit lines can be completely replaced by programs like SBA 7(A).

Joe Alkobi  founded  Main Street Finance Group, which is based near Fort Lauderdale, FL and helps small businesses find the right sources of financing for their companies.

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3 Attributes To Look For In SBA Loans

There are many types of SBA loans. You could call it a business loan, cash advance, short term loan, financing or working capital loans. The essential elements remain the same. When you need a business loan, the obvious criteria are loan amount, rate of interest, term of repayment, clauses in the loan agreement and if you would qualify. Not many business owners think beyond these obvious elements while considering or choosing a business loan. There is more to SBA loans than these attributes.

Here are three attributes that you must look for in SBA loans, whether it is a traditional business loan or a very short term cash advance.

Availability of Secured and Unsecured SBA Loans

Check if the lender offers both secured and unsecured loans. There are pros and cons of both secured and unsecured SBA loans when you pit them against one another. Even within the realm of secured and unsecured loans, there are substantial differences. The reason why you should look for the availability of both types of loans is simple: choice. You should be able to choose what suits you. It is possible you have some asset to use as collateral. You may not have any asset that is acceptable to the lender. You may choose not to offer any collateral even if you have an acceptable asset. Having this choice helps. A secured business loan will have more favorable terms than an unsecured cash advance so having the choice gives you the luxury to pick what is best for you in the given circumstances.

Loan Restructuring

Does the lender allow loan restructuring? Loan restructuring is usually available with mortgage, car finance, large business loans, student loans and even personal loans. There is no reason why an established lender should shy away from loan restructuring as it helps the borrower and is beneficial to the lender. You get the leverage to restructure your loan given the prevailing needs and circumstances. If you don’t have the option of loan restructuring, you are stuck with the terms even if they are not suited at that stage.

Flexible Repayment Plans

Flexible repayment plans will allow you to work on your business finances without being compelled to adhere to a system that you are facing problems with. Also, the lack of flexible repayment plans will give you fewer choices. From the loan term to the loan amount, look for flexibility while considering a lender.